Pennsylvania Governor Proposes Fast-Tracking Energy Projects and Tax Incentives

HARRISBURG, Pa. (AP) - Governor Josh Shapiro has announced plans to expedite the development of major energy projects in Pennsylvania and provide substantial tax breaks for projects that contribute to the state's energy grid and hydrogen production.

Shapiro's initiative comes ahead of his budget proposal submission to lawmakers, amid an energy crisis that threatens to increase electricity costs in the state, which is the second-largest natural gas producer in the nation.

The Governor emphasized the need for Pennsylvania to enhance its competitiveness and proactively address energy demands, citing the attraction of major projects in other states, such as data centers and electric vehicle manufacturing facilities.

"Pennsylvania needs to seize the moment," Shapiro said. "We must take decisive actions to establish new energy sources and prevent the state from being left behind."

Shapiro highlighted the absence of a dedicated entity for expediting energy project approvals in Pennsylvania, a situation he aims to rectify with the creation of the Pennsylvania Reliable Energy Siting and Electric Transition Board. The board would streamline permitting processes and provide support for innovative energy initiatives.

"We require immediate action, not delayed implementation," Shapiro stated.

Under the proposed plan, substantial tax credits would be offered to large-scale projects involving electricity generation, hydrogen production, and sustainable aviation fuel. Power plants could receive up to $100 million annually for three years, hydrogen producers could receive up to $49 million annually, and aviation fuel producers could receive up to $15 million annually.

Shapiro's proposals face potential opposition from Republican lawmakers, who have expressed concerns about the impact on the state's ability to attract new natural gas power plants.

One notable project that Shapiro intends to support is a proposal by CNX Resources to construct a $1.5 billion hydrogen-fuel facility at the Pittsburgh airport. However, CNX has indicated its dependency on federal approval of tax credits for coal mine methane under former President Joe Biden's climate change mitigation plan.

The rising demand for energy-intensive data centers has fostered interest in the development of nuclear power plants, small modular nuclear reactors, and large-scale renewable energy installations.

Despite the growing energy demand, the supply is facing challenges due to efforts to transition away from fossil fuels and the retirement of aging nuclear plants. In recent months, Shapiro and other state officials have urged the operator of the mid-Atlantic electricity grid to mitigate rate increases that could lead to unjust electricity bill hikes for consumers.