It was an eventful year in the energy space, as the Commonwealth looked to utilize the resources currently in place and expand on new and innovative technologies. From the Governor’s Office to the Legislature and state agencies, these entities worked to shape the future of energy and environmental policy.
Administration
On March 13, Governor Josh Shapiro unveiled his plan to “protect and create nearly 15,000 energy jobs, lower utility bills for Pennsylvania households, and take real action to address carbon pollution”. The Governor’s plan includes two initiatives: the Pennsylvania Climate Emissions Reduction Act (PACER) and the Pennsylvania Reliable Energy Sustainability Standard (PRESS). If passed by the Legislature, the Governor projected the plan would save ratepayers $252 million in the first five years, while generating $5.1 billion in investment in clean, reliable energy.
PACER creates an emissions reduction program, requiring large emitters to pay their fair share. 70% of funding (proceeds from Pennsylvania electricity customers) will be returned directly to customers as an on-bill rebate by the Pennsylvania Public Utility Commission (PUC). 30% of funding (proceeds from customers in other states) will support energy efficiency projects.
In the 2023-2024 legislative session, PACER implementation language was included in HB 2275 (Abney, D-Allegheny) and) and SB 1191 (Comitta, D-Chester). If PACER were enacted, Pennsylvania would no longer participate in the Regional Greenhouse Gas Initiative (RGGI).
PRESS will unlock a wave of new investment in advanced energy technologies and incentivize new development, with a potential of over $5.1 billion in direct investment by 2035. PRESS targets specific forms of energy development to build a more diverse, reliable grid. There is a strong focus on resilient forms of generation, including battery storage, natural gas, and nuclear power.
PRESS raises the target for the cleanest and renewable energy projects in Tier I to 35% by 2035; it raises the target for Tier II to 10%; and it creates a new Tier III that includes alternative sources or power like co-blended or low emission natural gas and other step-stone resources, with a 5% target by 2035. In addition, PRESS ensures the continuity of the existing clean energy nuclear fleet by creating a mechanism for those facilities to receive support in the event they are threatened with closure. In the 2023-2024 legislative session, PRESS implementation language was included in HB 2277 (Otten, D-Chester) and SB 1190 (Santarsiero, D-Bucks). None of the PACER or PRESS bills saw much momentum during the 2023-2024 legislative session; it remains to be seen whether they will be reintroduced in 2025.
Then on April 22, the Governor unveiled the Commonwealth’s renewable energy initiative, the Pennsylvania Project to Utilize Light and Solar Energy (PA PULSE). PA PULSE provides that, by contract, 50% of the government’s electricity will come from ten new solar arrays over the next fifteen years. In total, the project will supply 361,000 megawatt-hours of electricity annually to 16 state agencies, making it the largest solar commitment by any state. PA PULSE will reduce the Commonwealth’s carbon footprint by 157,800 metric tons of CO2 each year.
Department of Environmental Protection (DEP)
In January, the Shapiro Administration announced the implementation of new policies requiring operators to publicly disclose chemicals used in drilling and hydraulic fracturing earlier in the well development process. Furthermore, DEP is pursuing formal rulemaking and policy changes, including improved control of methane emissions aligned with EPA performance standards, stronger drilling waste protections, and corrosion protections for gathering lines that transport natural gas.
Federal money was awarded on DEP on July 22, when Environmental Protection Agency (EPA) Administrator Michael Regan announced the award of a $396 million grant for the RISE PA project. Under RISE PA, Pennsylvania will establish a competitive grant program to reduce pollution from industrial sources, which could reduce 5.2 million tons of carbon by 2050 – or about 10% of Pennsylvania’s annual industrial emissions. Examples of eligible initiatives could include installing energy-efficient heat recovery systems to reduce the energy required to heat or cool an industrial facility, electrifying an industrial plant by swapping out diesel-powered generators with equipment that runs on electricity, and capturing coal mine methane from mining operations.
Also in the oil and gas space, on October 2, DEP launched a new grant program aimed at plugging orphaned oil and gas wells. The new program is part of the $76 million in funding from the federal Infrastructure Investment and Jobs Act. It offers grants up to $40,000 for wells 3,000 feet deep or less, and up to $70,000 for wells deeper than 3,000 feet. The grants will be available to qualified well pluggers for orphan wells, which are wells that were abandoned before 1985. Applications are currently being accepted and grants will be distributed on a first-come, first-served basis.
Permitting
Cutting red tape and making government more business and user friendly has been a main goal of the Shapiro Administration over the last year.
Most notably, DEP launched two initiatives to speed up the permitting process on August 12: the Streamlining Permits for Economic Expansion and Economic Development (SPEED) program; and the Chapter 105 Joint Permit Pilot Program.
The SPEED program will provide additional flexibility by allowing permit applicants to choose to have a DEP-verified and qualified professional conduct the initial review of the application. DEP staff will review the recommendations of the qualified professional and make a final permit decision or identify technical deficiencies to the applicant. DEP will have final authority over all permit decisions.
SPEED would be applicable to the following applications: Air Quality Plan Approvals (Chapter 127), earth disturbance (Chapter 102), dam safety (Chapter 105), and individual water obstruction and encroachment (Chapter 105) permits. Applicants for those permits will agree to pay any review fees incurred by the qualified professional and any permit application fees.
The Chapter 105 Pilot Program for Individual Joint Permit Applications should reduce errors in applications and cut the total time to process an application by 63 days. Similar to the Chapter 102 Pilot Program, launchedon May 1, 2024, applicants will need to meet with DEP prior to submitting a permit application. The Chapter 105 individual Permit Pilot Program will give review priority to publicly funded energy projects and environmental restoration projects.
On November 19, DEP announced they reduced its permit backlog by 75% since November 1, 2023, and completely eliminated the backlog for oil and gas permits. DEP sped up its permitting process through the PAyback program, which assures a moneyback guarantee for permit applicants if their application is overdue. Furthermore, over the last year, DEP added 225 employees to carry out critical functions like public health and safety inspections and permit application reviews and upgraded technology to increase transparency for permit applicants and residents and improve record keeping systems.
Public Utility Commission (PUC)
This year was busy at the PUC, beginning with the Commission issuing an Advanced Notice of Proposed Rulemaking (ANOPR) on February 22, seeking comments on the use of Distributed Energy Resources (DERs) as a mechanism to help increase energy efficiency, enhance service, and potentially lower costs. DERs, also known as “virtual power plants”, use available energy when it is the cheapest, cleanest, and most plentiful.
On April 4, the PUC approved a final policy statement establishing guidelines for the use of electricity storage by electric distribution companies (EDC). Electricity-storage technology, namely batteries, can be used by EDCs instead of or in addition to more traditional “wired” solutions, to enhance the reliability and resilience of the electric distribution grid and help provide better service to customers.
On June 13, the PUC approved revised guidelines and procedures for reviewing and evaluating the acquisition and valuation of municipal or authority-owned water and wastewater systems under Section 1329 of the Public Utility Code. These updates include the introduction of mandatory in-person public hearings, enhanced rate impact notification for customers, standardization of methods used by utility valuation experts (UVEs), and new criteria for the PUC to assess the fairness of acquisition prices. Then on August 15, the PUC issued a report identifying a Reasonable Review Ratio (RRR) that will serve as an additional reference for Section 1329 proceedings.
At their June 20 meeting, the Independent Regulatory Review Commission (IRRC) approved a PUC Revised Final Form Rulemaking Order (RFFRO) strengthening state public utility safety standards related to the pipeline transport of hazardous liquids in intrastate commerce. Hazardous Liquid Public Utilities (HLPUs) will now have Pennsylvania-specific standards to comply with, in addition to federal regulations, all of which center on preventing inadvertent returns, leaks, subsidence events, and water contamination events related to the construction, operation and maintenance of highly volatile liquid pipelines and other public utility pipelines transporting hazardous liquids.
On August 1, the Commission moved to accelerate the process for identifying, removing, and replacing older plastic piping and components in natural gas distribution systems. The plastic pipe replacement initiative includes three components: information gathering, adding at-risk plastic pipe to existing replacement plans, and new pipeline replacement plans for smaller utilities.
The Commission voted on August 23 to support the establishment of a “Common Application Form” (CAF). The CAF, a key recommendation of the PUC’s Universal Service Working Group, will streamline the enrollment and recertification process for eligible customers in various universal service programs, including energy utility assistance programs, low-income usage reduction programs, and hardship fund programs.
On September 12, the PUC published its fiscal year 2023-24 annual report on management audits (MAs) and management efficiency investigations (MEIs), which work to identify efficiencies and savings for utilities, including potential improvements in operations, service reliability and safety programs. Throughout the fiscal year, the Bureau of Audits conducted audits and efficiency investigations of utility companies that identified $3.13 million in projected annual savings and $4 million in one-time savings.
Also in September, Commissioner Ralph Yanora was confirmed for a second five-year term. Yanora, who has more than 40 years of experience in the water, wastewater, natural gas, and stormwater sectors, was first appointed to the PUC in 2019. He also serves as Co-Vice Chair of the National Association of Regulatory Utility Commissioners (NARUC) Committee on Water.
Lastly, on December 12, the PUC prepared a Statement of Policy pertaining to Chapter 14 of the Public Utility Code. The goal of Chapter 14 is to increase timely collections while ensuring that service is available to all customers based on equitable terms and conditions. In 2014, the General Assembly reenacted Chapter 14 with another ten-year sunset provision. However, an agreement to extend the sunset once again wasn’t reached before the end of this legislative session, leading to an anticipated sunset on December 31, 2024. The Statement of Policy: (1) ensures that utility rates and tariffs are just and reasonable; (2) provides the final payment arrangement orders are presumed to remain in effect unless reversed on appeal or amended after notice and opportunity to be heard; and (3) all final orders issued pursuant to Chapter 14 remain in effect and are enforceable by the Commission.
Legislation
HB 109 (Ciresi, D-Montgomery) was signed into law as Act 29 of 2024. The bill prohibits providers of certain services (electric generation service, heating oil, natural gas, etc.) from imposing a fee for early termination of a service contract upon the death of the service recipient. The executor or administrator of the estate must provide notice to the service provider and submit a copy of the decedent’s death certificate within 180 days of the written notice. Any early termination fees or charges would then be waived as of the date of the written notice.
HB 1032 (Fiedler, D-Philadelphia) was signed into law on July 17 as Act 68 of 2024. The bill established the Solar for Schools Grant Program in the Department of Community and Economic Development (DCED) to provide competitive grants to eligible applicants, including school districts, intermediate units, area career and technical schools, charter school entities, and community colleges, for costs related to solar energy projects. The application window is now open and closes on January 31, 2025.
SB 831 (Yaw, R-Lycoming) was signed into law on July 17 as Act 84 of 2024. The bill provides a legal and regulatory framework for potential carbon capture, utilization, and sequestration (CCUS) in Pennsylvania.
SB 1237 (Baker, R-Luzerne) was signed into law on October 29 as Act 127 of 2024. The bill eliminates the current sunset date of December 31, 2024 of the Underground Utility Line Protection Law (PA One Call) and makes several other changes to the law.
