Shapiro’s budget proposal seeks more renewable energy to modernize Pennsylvania’s grid
Shapiro’s new “Lightning Plan” is an attempt to alter Pennsylvania’s energy mix by including more solar and wind.
Gov. Josh Shapiro noted during his budget address Tuesday that Pennsylvania ranks second only to Texas in natural gas production.
But it ranks 45th in the nation in production of renewable energy. That means only 3% of the state’s energy comes from solar, wind, and other nonfossil fuel sources, according to Yale Climate Connections, which is run by the Yale Center for Environmental Communication. Texas gets 26% of its electricity from renewables.
Shapiro’s new “Lightning Plan” is an attempt to alter Pennsylvania’s energy mix. Yet Shapiro will almost certainly need legislative support on a number of items in his attempt to modernize the state’s approaches to energy.
“The Lightning Plan … takes bold steps to increase energy production, explore pathways to renewable sources, and grow our economy,” Shapiro said, adding that the plan would cut energy costs, create jobs, and hold down electric bills. “The time for action is now.”
His goal: achieve 35% “clean” energy by 2035.
» READ MORE: Gov. Josh Shapiro proposes $51.5 billion budget with major investments in energy and health care
To help with that, Shapiro would institute a cap on carbon and invest in reducing electricity costs. He would use tax credits and other methods to provide incentives for renewable energy, including battery storage, and set up a board to help streamline energy projects. Currently, Pennsylvania is one of only 12 states without such a board to handle siting decisions for key energy projects.
What’s in Shapiro’s energy plan?
The outline of the Lightning Plan was released Jan. 30. Highlights include:
Providing tax credits of up to $100 million a year for new “reliable energy” plants.
Offering up to $7 million a year in tax credits for up to seven regional clean hydrogen facilities, which use solar, wind, or nuclear to produce hydrogen.
Spending up to $15 million a year for a facility that produces sustainable aviation fuel. This would apply to a $1.5 billion partnership between CNX and KeyStateEnergy at Pittsburgh International Airport to take methane from coal mines and use it to produce fuel.
Setting a carbon cap, which places limits on the total amount of carbon dioxide emissions allowed within a specific region or industry, through the Pennsylvania Climate Emissions Reduction Act (PACER). In such a program, fossil fuel energy producers buy allowances to exceed caps and the revenue goes to the state. Shapiro’s plan would direct 70% of that revenue to residents and rebates on their electrical bills.
Modernizing the state’s energy standards to encourage nuclear, renewable energy, and battery storage through the Pennsylvania Reliability Energy Sustainability Standard (PRESS) program. It requires the state to get 35% of its energy from “clean energy” sources such as solar and wind, but also small modular nuclear reactors.
Establishing a board to streamline permitting for energy projects.
Updating Act 129, which took effect in 2008, to give the state’s Public Utility Commission oversight on electric distribution companies with the goal of reducing energy consumption and demand.
Shapiro also announced his budget would add another $25 million for schools for solar energy on top of the current $100 million already allocated.
‘Ambitious in scope’
Environmental groups were excited about the introduction of “community energy,” which would allow segments of communities to tap into energy generated by solar panels on warehouses.
“Overall, I think the plan is ambitious in its scope,” said Adam Nagel, director of government affairs for the nonprofit PennFuture, an environmental advocacy group. “It will help bolster things nuclear energy and renewals, and help deal with us and diversifying our grid while making it more reliable and affordable at the same time.”
David Masur, executive director of the nonprofit PennEnvironment, also an advocacy group, said a revamp of Act 129 was much needed.
“Act 129 mandates that the state meet certain energy conservation requirements every year,” Masur said. “But it hasn’t been updated since [former Gov. Ed] Rendell signed it into law. ”
Shapiro’s speech will outlined plans to provide up support for “sustainable aviation fuel” to be made in the CNX and KeyState Energy partnership. In general, environmental groups are against so-called blue hydrogen projects that they say are made from fossil fuels. They prefer “green hydrogen,” which is produced through solar or wind.
Will it pass?
Parts of the governor’s plan, however, will need to be passed through accompanying legislation.
It remains to be seen how much support Shapiro will get for segments of his plan, such as the cap on carbon. Former Gov. Tom Wolf ran into a Republican wall of delays and lawsuits while trying to join the multistate Regional Greenhouse Gas Initiative, which sets a limit on carbon emissions.
Shapiro’s budget proposals face a Republican-controlled Senate and a House tied 101-101 after a Democratic member died following a medical emergency last month. A special election is scheduled for next month.
The Senate Republican leadership seemed in no mood Tuesday to embrace much of the governor’s plans.
State Sen. Scott Martin, who represents Berks and Lancaster Counties, referred to the cap program an “$800 million carbon tax on Pennsylvanians.”
“Everybody except the governor today has acknowledged the structural deficit that we have and the realities that we are heading toward fiscal instability,” Martin said.