Pa. Governor Proposes Energy Strategy to Increase Power Generation

On the heels of an agreement with the regional electric grid operator to limit increasing prices, Pa. Gov. Josh Shapiro recently announced a comprehensive energy strategy that will streamline permitting for energy projects and provide incentives to build more power generation.

Shapiro’s six-part “Lightning Plan,” named in honor of Ben Franklin, is part of this year’s budget proposal. It is aimed at attracting jobs and investment, keeping electric costs down and protecting grid stability. Pennsylvania is the leading electricity exporter in the nation, sending almost 80 megawatt hours each year to other states in the PJM regional grid. At the same time it is the second-largest natural gas producing state, and natural gas has taken over the top spot as the fuel for power generation, providing 59% of the state’s power.

Shapiro said the state has long been an energy leader but needs an “all-of-the above” energy plan to meet future needs and promote investment. “Energy consumption is rising in Pennsylvania and around the world; the nation is facing more extreme weather events; the limits of the energy grid are constantly being tested, and utility costs are on the rise as a result of global instability and foreign wars. Doing nothing is not an option,” a press release states.

One focus of the plan is to streamline the process for building new energy projects by creating a Pennsylvania Reliable Energy Siting and Electric Transition (RESET) board to handle all siting decisions for energy projects, reducing red tape and delays. Shapiro noted that Pennsylvania is one of just 12 states without such a state entity.

The plan also proposes to revamp a state tax credit program that hasn’t been used to make energy projects eligible, including up to $100 million for three years for new generation projects, and a regional clean hydrogen tax credit of up to $49 million. This is aimed at incentivizing new generation.

Other proposals in the plan include updates to energy efficiency programs, and already announced efforts to update energy efficiency standards and instituting a carbon emissions cap plan. The plans will require legislative action to go into effect.

PJM Interconnection, the regional grid operator for 13 states including Pennsylvania, has been warning that demand for power is rising due to electrification and construction of large energy-sucking data centers and industrial projects. At the same time, fossil-fuel power plants that supply reliable, around-the-clock, generation are being retired, and new power projects are not coming online fast enough due to economic and policy issues.

Shapiro recently reached an agreement with PJM to set a cap on how much it will pay for

power after filing a complaint with the Federal Energy Regulatory Commission over what his administration said are flaws in PJM’s capacity auction rules that are contributing to the energy bottleneck.