By: Mike Manzo
The Commonwealth’s Court’s decision to throw Pennsylvania’s participation in the Regional Greenhouse Gas Initiative, while not exactly a shock, should trigger the start of a long overdue conversation on the state’s Alternative Energy Portfolio Standards Act.
No substantial amendments have been made to the act, which became effective in November of 2004. It calls for 8% of the state’s electric generation to come from Tier 1 sources (wind, solar, etc.) and 10% of Tier 2 sources (waste coal, large scale hydro, etc.), all by May of 2021.
I was privileged to be part of the negotiating team that crafted the AEPS, which was one of the first of its kind in the nation (buy me a beer and I will tell you how waste coal made it into Tier 2.) Governor Ed Rendell, DEP Secretary Katie McGinty and a host of others worked with lawmakers from both sides of the aisle, and the Act, sponsored by GOP Senator Ted Erickson, passed with bipartisan support, 32-17 in the Senate and 165-37 in the House.
Now, the Act should be the centerpiece of “what comes next” now that RGGI is headed to the dustbin of history, assuming Governor Josh Shapiro doesn’t appeal to the Supreme Court, which seems very unlikely since he has been quite skeptical of its value since he took office.
The political argument for aggressively updating the AEPS is a simple one for elected officials interested in combatting climate change, but it is also simply good business to have a diverse portfolio of energy sources. Companies now choose facility locations based on a state’s energy portfolio, along with other factors.
Let’s look at ruby red Indiana for instance. Our client, Pennsylvania-based Doral LLC, just cut the ribbon on the largest solar array in the country, the aptly named Mammoth project, a 1.3-gigawatt array that Indiana governor Eric Holcomb and legislative Republicans celebrated. The reason? First and foremost, farmers support solar projects. But the other upside for Indiana is that more and more companies are now calling the Hoosier State “home” because of its commitment to alternative energy. Pennsylvania should be no different.
So, what comes next? Unfortunately, Pennsylvania is likely at a standstill in bringing more projects online in the near term. The Pennsylvania Jersey Maryland grid (PJM) is experiencing a complete meltdown in processing applications. Governor Shapiro has already called upon the PJM to do some serious queue reform, as projects are waiting years for connectivity to the grid. To be fair, the PJM went from processing a few hundred applications a year to thousands. If you applied today to build a new utility-grade solar or wind farm in Pennsylvania, you would be lucky to get your green light within six years.
But PJM reform and supply chain problems aside, the time for lawmakers to start seriously discussing a more aggressive all-of-the-above energy strategy is now. Building green energy projects can be done with building trades labor (see, Doral LLC), are good for farmers, help the local tax base, create jobs and send a signal to the job creators that the state is innovative and diversified in its energy policy.
With Pennsylvania getting only a small piece of two clean hydrogen hubs (thanks, Joe Manchin) and RGGI off the table, it is time to dust off the AEPS and swing for the fences.