Pa. senator says energy bills on hold until climate program settled

The legislation would rewrite an unused tax credit in an effort to increase energy production in the state, plus promote and regulate solar energy.

By KATE HUANGPU
Spotlight PA

HARRISBURG — A group of bills aimed at boosting electricity production and regulating clean energy has rare, bipartisan support in Pennsylvania’s divided legislature.

But a key Republican leader says he doesn’t plan to consider them until a court issues a final verdict on a long-debated interstate cap-andtrade program.

That program is the Regional Greenhouse Gas Initiative, or RGGI, which the previous Democratic administration joined via executive order in 2019 in an effort to combat climate change. It has been mired in litigation since.

The state’s highest court is preparing its ruling on the program’s fate after hearing arguments in May. State Senate Majority Leader Joe Pittman (R., Indiana) told Spotlight PA that until a decision is made, his chamber is unlikely to act on energy bills.

The Senate, Pittman said, is “very limited” in its ability to pass energy- related legislation because the RGGI ruling will “dictate the course of energy production” in the state.

“For us to look at other proposals that the governor has [isn’t] very productive,” Pittman said. “You could say all you want about this EDGE tax credit. If RGGI goes in, those tax credits won’t mean a darn thing.” States that are a part of RGGI agree to cap the amount of carbon that emitters within their borders can release, lowering the cap over time. These emitters, typically energy companies, must buy credits from the state to emit any carbon, the proceeds from which go to the state.

Supporters say that the carbon cap will drastically reduce the amount of harmful greenhouse gases emitted in the state while having minimal effects on energy costs. Opponents argue it will drive energy companies away from Pennsylvania and discourage them from building power plants, leading to higher costs for consumers.

EDGE, or Economic Development for a Growing Economy, is a $2.6 billion package of tax credits that lawmakers passed in 2022 that has never been used. Democratic Gov. Josh Shapiro has proposed rewriting the package to make it easier for companies to take advantage, and the effort has bipartisan support, including in Pittman’s chamber.

The original credit would have benefited hydrogen fuel producers, dairy farmers, semiconductor manufacturers, and petrochemical producers that use natural gas.

One rewrite of the package already passed the Democratic-controlled state House with support from a handful of Republican members.

The measure mirrors Shapiro’s proposal, lowering the minimum investment threshold and the number of jobs a business must create to qualify for the incentive. It would also replace the credit for natural-gas-powered petrochemical producers with one that benefits clean energy producers.

Republicans in the state Senate have made it clear that they, too, want the tax credits to be usable.

It could be a way to “encourage [energy] generators to come to Pennsylvania,” state Sen. Gene Yaw (R., Lycoming), chair of his chamber’s critical Environmental Resources and Energy Committee, told Spotlight PA.

Different visions for the rewrite have sprung up in the state Senate. A bipartisan duo in the upper chamber proposed a bill narrowly focused on helping semiconductor manufacturers claim their credit more easily. Another Democrat and Republican pair pitched amending the credit to benefit companies that develop space-related infrastructure.

Organized labor is on board. Rob Bair, chair of the Pennsylvania Building and Construction Trades Association, a group that represents tens of thousands of union workers, pointed to the new clean energy production provision that Shapiro proposed as a way to drive investment.

“We have the opportunity to rewrite it and use it in conjunction with the IRA now,” Bair said, referring to the federal Inflation Reduction Act, which rewards states with significant federal dollars for clean energy projects. “It still gives us a good pathway to move forward in Pennsylvania.”

Pittman said he hasn’t ruled out considering the state House’s EDGE bill, telling Spotlight PA, “At the end of the day, I’m very deferential to the chairs of our respective committees. So I would need to hear a little more from them, if there’s value in what the House passed.”

There are other energy bills that he is more enthusiastic about. All are longtime GOP priorities that Democrats have so far balked at, including measures to pull the state out of RGGI, create an independent office to conduct energy research, and prevent municipalities from banning specific fuel sources, like natural gas.

“Those are all issues we’re more than happy to engage in and see go across the finish line,” Pittman said.

The EDGE bill isn’t the only energy measure that has some bipartisan support.

A proposal to allow communities to lease solar panels passed the state House with votes from both major parties. Another measure, sponsored by Yaw, aims to tighten oversight of Pennsylvania’s growing solar energy industry and passed with widespread support in the state Senate.

Lawmakers are also considering whether to renew a popular program, first passed last year, that provides grants to schools for installing solar infrastructure.

Pittman said he has no plans to move those — at least, not “in the period of weeks we’re going to be dealing with the budget.” Lawmakers are supposed to complete that work by June 30.

At least one Democratic lawmaker is more optimistic.

State Rep. Liz Fiedler (D., Philadelphia), the chair of her chamber’s Energy Committee, says that talks are still ongoing, and it’s “very likely” that EDGE and the solar bills will be “looped into budget negotiations.”

In early June, she says, everything is still on the table, especially on policy that has strong bipartisan support.

“I think a lot of it is making sure we keep the door open for communication,” Fiedler told Spotlight PA. “Our Republican counterparts in the Senate have expressed openness … but we all hold our breath a little bit [in June].”

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