Shapiro Proposes Cap-and-trade, More Renewables for Pa.

Pennsylvania Gov. Josh Shapiro (D) on March 13 announced a new state energy plan he says will ramp up renewable production and save ratepayers $252 million while generating $5.1 billion in clean energy investments. 

The Keystone State is home to the nation’s first oil well and civilian nuclear reactor, but Shapiro’s office said it’s now falling behind other states in diversifying energy sources.  

Shapiro’s legislative plan aims to change that by establishing an emissions reduction program that will create a resilient electricity grid by 2035, attract more federal dollars, and support clean nuclear and low-carbon natural gas-fired generators. 

“From the very beginning, I have made clear that any energy policy supported by my administration must meet the three-part test of protecting and creating energy jobs, taking real action to address climate change pollution and ensuring reliable, affordable power for consumers in the long term,” Shapiro said in a statement. “My energy plan is built to do all three, making sure the first dollar goes to Pennsylvania ratepayers and ensuring Pennsylvania will continue to be a leader on energy for decades to come.” 

The governor is proposing the Pennsylvania Climate Emissions Reduction Act (PACER) to set up a cap-and-invest program that would take the commonwealth out of the Regional Greenhouse Gas Initiative and allow it to set its own cap on emissions. 

Seventy percent of PACER’s benefits would be returned to end-use customers as rebates on their electric bill — a higher percentage than any cap-and-trade program in the country. PACER also would support projects that cut air pollution, further reduce customer energy bills and invest in new job-creating clean energy projects, including carbon capture and storage, geothermal, and clean hydrogen. 

Shapiro also proposed a new renewable portfolio standard under legislation called the Pennsylvania Reliable Energy Sustainability Standard (PRESS), which builds on the state’s existing Alternative Energy Portfolio Standards (AEPS). It adds nuclear power and next-generation technologies like fusion and clean-burning forms of natural gas. 

PRESS would require Pennsylvania to get 50% of its electricity from a diverse range of resources by 2035, including 35% from clean resources such as solar, wind, small modular reactors and fusion; 10% from sustainable sources like hydropower and battery storage; and 5% from “ultra-low emission” forms of natural gas and other traditional fuels. 

PACER and PRESS are meant to work together to deliver the governor’s goals of protecting and creating energy jobs, cutting costs, and ensuring energy independence. Shapiro also wants legislators to create legal and regulatory frameworks around carbon capture and storage. 

Democratic Support, Republican Opposition

Shapiro’s office released a supporting statement from leaders in the state’s Democrat-controlled House of Representatives. 

“House Democrats are committed to reducing harmful greenhouse gas emissions while strengthening our economy and energy infrastructure, investing in our communities, and cutting costs for families,” their statement said. “Governor Shapiro has brought together many different sectors to explore how Pennsylvania can be a clean energy leader, and today’s announcement represents a step forward toward that goal.” 

While Democratic leaders in the Republican-run Senate also voiced support for the legislation, the body’s majority leader, Sen. Joe Pittman (R), came out against a cap-and-trade program. The senator has opposed the state’s membership in RGGI, the subject of a state court case. 

“It now appears the governor agrees with the Commonwealth Court’s ruling asserting a cap-and-trade program for electric generation is a tax on electricity and would require legislative approval,” Pittman said. “The governor correctly points out it is time we stop losing to Ohio, however, any cap-and-trade program applying solely to electric generation in Pennsylvania and not our competitors, does not fit the bill.” 

He added that any energy policy changes in Pennsylvania must prioritize generation, grid reliability and consumer affordability. 

Pennsylvania Public Utility Commission Chair Stephen DeFrank expressed support for the plan. 

“The PUC stands ready to work with Gov. Shapiro’s administration and the General Assembly to implement a comprehensive energy policy,” DeFrank said in a statement. “We are at a very critical point in energy transition for our state, our nation and globally and it’s incumbent upon all parties to work together to develop new solutions. The commission has implemented provisions of the AEPS Act for two decades, and we understand it is time to take the next positive and important step for this commonwealth, while giving our consumers a voice in the process.”