Announced in January, the Governor’s “Lightning Plan” package of clean energy legislation has been introduced in the House. Companion legislation in the Senate is awaiting Committee assignment by its leadership.
There are six House bills in total, representing several decarbonization strategies for which PEC has long advocated. The proposals include both new ideas and revisions to existing laws and programs that, taken together, paint a compelling picture of the potential to provide clean, affordable, and reliable energy.
To better understand the bills and some of their impacts, here’s a quick breakdown:
House Bill 500 – EDGE Tax Credit Programs
House Bill 500 updates an assortment of different energy -related tax credit programs (collectively known as “EDGE,” which stands for Economic Development for a Growing Economy). Three are of interest to the energy and environmental space.
- The first is a new Reliable Energy Investment Tax Credit for the building or improvement of renewable or low-emission energy generation facilities.
- The second is a series of changes to an existing hydrogen tax credit that would be more tightly focused on the purchase of “clean” hydrogen. The value of the tax credit increases as the hydrogen meets progressively stricter CO2 intensity metrics (which are based on federal guidelines contained in the 45V program).
- The final is a new “sustainable aviation fuel” tax credit for fuel that is not derived from petroleum, kerosene, or palm fatty acid distillates.
All three tax credit programs also have requirements based on minimum investment, job creation, and prevailing wage metrics, helping Pennsylvania advance business investments that benefit the environment and skilled workers.
House Bill 501 – the Pennsylvania Reliable Energy Sustainability Standard (“PRESS”)
House Bill 501 would amend the state’s existing Alternative Energy Portfolio Standards (AEPS) law to require a greater percentage of electricity in the Commonwealth to come from clean and lower-emitting sources of generation. The legislation also makes room for more qualifying sources of energy, including advanced nuclear and existing generation facilities equipped with carbon capture technology, though cleaner generation and renewables are the foremost component. As the existing AEPS requirements ceilinged-out several years ago, Pennsylvania has fallen behind other states in deployment of clean energy investment and generation build, which has added to the stress of grid reliability and power demand in the state. The goal of PRESS would be to increase both using a more effective “Clean Energy Standard” framework for which PEC has long advocated.
House Bill 502 – Reliable Energy Siting and Electric Transition (RESET) Board
House Bill 502 would establish a new statewide siting approval board as an option for proposed energy generation facilities. This board would consider siting in the context of local land use controls only, and not state or federal permitting or approval processes. Project developers would have the choice of seeking approval at the local government level, or via this new siting board. The statewide board, however, could not override local authority to approve projects already rejected at the local level. The legislation also creates an advisory board comprised of different types of stakeholders to advise the RESET Board on review metrics and processes. This advisory board should look to help establish sound siting principles that are protective of communities and natural resources.
House Bill 503 – Pennsylvania Climate Emission Reduction (PACER) Program
House Bill 503 would replace Pennsylvania’s pending Regional Greenhouse Gas Initiative (RGGI) program with an alternative cap-and-invest model for reducing CO2 emissions from larger-scale electric generation. At present, Pennsylvania’s participation in RGGI, which has yet to take effect, is under challenge in the state court system. PACER would codify a new program that operates on the same market-based principles as RGGI, and sets specific requirements for allocation of resulting allowance fee dollars – primarily aimed at consumer rebates. PEC supports the RGGI program approach, but recognizes the value of PACER in meeting the Governor’s requirements of clean energy, consumer protection, and job growth.
House Bill 504 – Community Energy
House Bill 504 would allow for the creation, financing, and operation of community renewable energy generating facilities. Similar to the community supported agriculture concept, “community energy” means utilities must allow customers to opt into cleaner, locally sourced electric generation. This creates opportunities to support cleaner generation for individuals who could not otherwise do so — for example, those who cannot install solar at their own residence because of building constraints or for other reasons. The bill allows for additional incentives for siting these local generation resources on degraded lands, such as former industrial sites, and for providing power to lower-income residents.
House Bill 505 – Updating Energy Efficiency in Pennsylvania
House Bill 505 would update Act 129 of 2008. That law requires larger electric utilities to help consumers reduce their energy usage through improved efficiency (for example, upgrading to more energy-efficient appliances). House Bill 505 would update this decades-old law to include energy resiliency goals (including improved transmission infrastructure ), give utilities more flexibility to implement programs, and update cost-saving and investment metrics.
PEC supports the goals of the Lightning Plan and remains engaged with both the Administration and General Assembly on ways to improve and advance this forward-looking legislation. We share Pennsylvanians’ concerns about energy affordability and availability, grid resilience, carbon emissions, and the future of our energy economy. But we believe that taking proactive steps puts Pennsylvania in a much better position than passively accepting the status quo, which has not effectively addressed these issues. We appreciate the Governor’s leadership on these important issues and look forward to building bipartisan support in the legislature for clean, affordable, and reliable energy.