Governor Josh Shapiro announced Thursday a plan to accelerate large-scale energy projects in Pennsylvania by streamlining the permitting process and offering hundreds of millions of dollars in tax incentives, The Associated Press reports.
This proposal comes ahead of Shapiro’s third budget address to lawmakers as the state grapples with an energy crunch that threatens to raise electricity costs.
Shapiro, a Democrat, emphasized his goal of positioning Pennsylvania as a leader in the energy sector, highlighting the need to keep pace with other states that are attracting significant projects, such as data centers and electric vehicle factories. He noted that Pennsylvania is one of only a dozen states without a dedicated entity to expedite the approval process for energy projects.
To address this, Shapiro wants to create the Pennsylvania Reliable Energy Siting and Electric Transition Board, designed to streamline permitting and provide support for new energy projects. The proposed tax credits target large-scale projects producing electricity, hydrogen, and sustainable aviation fuel.
Under the proposal, power plants could qualify for up to $100 million annually for three years. The administration has yet to specify what types of power plants would be eligible for these incentives. In addition, hydrogen producers could qualify for up to $49 million per year, and sustainable aviation fuel producers could receive up to $15 million per year.
These plans require legislative approval. Republican lawmakers have been critical of Shapiro’s energy policy, arguing that it hinders the attraction of companies that want to build new natural gas-fired power plants in the state.
Shapiro has highlighted a project proposed by natural gas producer CNX Resources as an example of the type of initiative he wants to support. CNX aims to build a $1.5 billion facility at Pittsburgh’s airport to produce hydrogen-based fuels. However, CNX has stated that it will only move forward with the project if the federal government allows coal mine methane to qualify for tax credits that were central to President Joe Biden’s climate change plan.
The growing demand for energy is being driven by the expansion of cloud computing and artificial intelligence, which require massive amounts of power to run data centers. This increased demand has sparked proposals to bring retired nuclear plants back online, develop small modular nuclear reactors, and construct new renewable energy installations and natural gas plants.
This surge in energy demand occurs as the power supply is already strained by the shift away from fossil fuels and the decommissioning of aging nuclear plants. In recent months, Governor Shapiro and other state leaders have pressured the operator of the mid-Atlantic electricity grid to reduce the amount of money it offers to power plant owners, arguing that it unfairly inflates electricity bills across the region.
