November 2022 – Pennsylvania Policy Update

BPA tracks the latest policy updates and legislative issues in many states across the nation. See the latest policy information for Pennsylvania as of November 2022.

Disclaimer: Inclusion of any bills/regulations in this state policy update does not equate to BPA’s endorsement.

---

On October 19, the Pennsylvania legislature confirmed three commissioners to the Public Utility Commission (PUC), including the reappointment of Commissioner John F. Coleman Jr. and the new appointments of Commissioners Stephen DeFrank and Kathryn Zerfuss. With these appointments, the PUC has returned to its full, five-member panel through 2025.

Earlier this year, Governor Tom Wolf signed the annual Pennsylvania Budget into law, including $125 million in Federal COVID relief funding to establish the Whole-Home Repairs Program. The Program will provide financial assistance for low-income homeowners and renters to conduct home repairs and funding for training programs to meet the demand for these home repairs and upgrades (see HB 1421 below for full details on Pennsylvania’s annual budget). New funding for the Whole-Home Repairs Program comes after the Pennsylvania legislature approved legislation expanding C-PACE financing to include improvements in multifamily residential buildings and broadening eligible projects to include indoor air quality and resiliency improvements (see SB 635 below for full details).

Meanwhile, the General Assembly has voted to advance a constitutional amendment package enabling the legislature to disapprove state regulations – such as the Regional Greenhouse Gas Initiative (RGGI) – without the opportunity for a veto from the Governor, as is currently required by the Pennsylvania Constitution. The constitutional amendment must pass both chambers again in the next legislative session (2023-2024) before being presented as a statewide referendum for voters to approve or reject (see more details on SB 106 below)to advance into law. This new legislative measure comes as the Commonwealth Court of Pennsylvania continues to consider a lawsuit to block new regulations enabling the state’s participation in RGGI.

Legislative Monitor:

2022 Regular Session Dates: January 5, 2021, until December 15, 2022. **Note: Legislature meets throughout the year during a two-year session.

Bills that passed in 2022:

• SB 106 A Joint Resolution Proposing Amendments to the Constitution is a constitutional amendment package that would, among other provisions, exempt legislative measures relating to the disapproval of state regulation from requiring the Governor’s approval before taking effect. The legislation also alters the state constitution to declare that there is no constitutional right to publicly funded abortions and modifies requirements for voting registration. The joint resolution was approved by the General Assembly in July and must receive a second consecutive approval from both chambers during the 2023-2024 legislative session before it can be considered by voters in a statewide referendum.
• HB 1421 Fiscal Year 2022-2023 Budget includes a $125 million appropriation using Federal COVID relief funding to establish the Whole-Home Repairs Program. The budget directs the Department of Community and Economic Development (DCED) to develop and publish guidelines to implement the program providing funds to Pennsylvania counties to deliver grants and loans up to $50,000 for low-income homeowners and renters (80% of the area median income) to conduct home repairs that “address habitability concerns [and] improve energy or water efficiency.” The program will also provide funding for pre-apprenticeship and training programs to meet demand for these home repairs and upgrades. The finalized budget also provided $25 million for the Low-Income Home Energy Assistance Program (in addition to money already provided through Federal appropriations), which supports low-income households with their heating and cooling energy costs, bill payments, and weatherization or energy-related home repairs. The FY22-23 Budget bill was approved by both the House and the Senate with a bipartisan majority on July 8. The Governor signed it into law the same day, taking effect immediately.
• SB 635 / HB 1760 Amending C-PACE amends the Commercial Property Assessed Clean Energy financing program to include commercial, multifamily rental property or mixed-use property, which contains no less than five residential units and broadens eligible projects for financing to include indoor air quality and resiliency improvements. Resiliency improvements must generate “measurable energy savings or reductions in water use.” After gaining approval in the Senate in December 2021 with a vote of 42-8, SB 635 passed through the House on June 29. It was signed by the governor on July 7th and will take effect in September.

Bills currently under consideration:

• HB 2795 Amending Title 66 (Public Utilities) of the Pennsylvania Consolidated Statutes would prohibit the Public Utility Commission from disapproving an electric utility’s energy efficiency and conservation plan due to the inclusion of a mechanical insulation measure, which is currently not demonstrated to be cost-effective using a total resource cost test. “Mechanical insulation” is defined as insulation materials, facings, and accessory products used for thermal requirements for mechanical piping and equipment, hot and cold applications, and heating, venting, and air conditioning applications. Upon introduction, HB 2795 was referred to the House Consumer Affairs Committee on September 1, where HCAC did not hold a hearing or vote at the time of this writing.
• SB 275 Amending Title 53 of the Pennsylvania Consolidated Statutes prohibits municipalities in Pennsylvania from restricting the types and sources of energy that consumers may use for homes and businesses. Specifically, the bill would ban municipalities from discriminating against a utility service provider based on the source of energy provided for a consumer or prohibiting the ability of an individual or entity to use the services of an authorized utility provider. The legislation also clarifies that these policies may not affect the authority of a municipality to “take steps designed to reduce greenhouse gas emissions from municipal facilities and operations.” SB 275 was approved by the House and Senate before the Governor vetoed the bill on July 11. The legislature has not scheduled a hearing or vote to consider overturning the Governor’s veto at the time of this writing.
• SB 119 / HB 637 Requiring Legislative Approval for Imposing a Carbon Tax requires legislative approval before Pennsylvania imposes a carbon tax on employers engaged in electric generation, manufacturing, or other industries operating in the Commonwealth, or enters any multi-state program, such as the RGGI, that would impose such a tax. The legislation passed through the Senate with a vote of 35 to 15 and was then referred to the House Environmental Resources & Energy Committee, which approved it in a 16 to 9 vote. The House has not scheduled a final vote for the bill. HB 637, its counterpart in the House, was passed on March 30.
• SB 1135 / HB 2617 House Stabilization Initiative Act creates a “Whole Home Repairs and Homeownership Affordability Fund, “which requires the Department of Community and Economic Development (DCED) to establish a Whole-Home Repairs Fund and Program. This fund would provide grants and loans of up to $50,000 for homeowners or landlords to improve energy and water efficiency for low and middle-income homeowners and renters (defined as 80% of the median income or below). The Program may also provide funds to increase retention in workforce development programs, including through training stipends and costs related to the implementation of apprenticeship and on-the-job training programs, to address habitability concerns, and to coordinate across existing home repair programs. The DCED would be required to develop specific program guidelines, including funding uses and program implementation, within 180 days of the bill’s enactment. The Senate Bill, SB 1135, was approved on June 20 in the Senate Urban Affairs & Housing Committee. The amendment establishes a “Homeownership Affordability Program” (in addition to the Whole-Home Repairs Fund) to provide matching grants for “projects that assist low-income individuals in enhancing the affordability of becoming a homeowner including new construction of homes and multifamily buildings and relevant property acquisition.” The amendment also establishes a “Student Housing Repurpose Program” to provide grants to use, repurpose, or construct student housing buildings in Pennsylvania. It clarifies that the State may not award grants to more than one applicant per county for each project type (i.e., one county may receive a grant for the Whole-Home repairs project and the Home Ownership Affordability separately). On July 8, the legislation was incorporated into the budget and passed as part of HB1421 with the above mentioned changes.
• SB 979 Amending the Alternative Energy Portfolio Standards (AEPS) Act updates the original AEPS to expand from two to seven tiers to include carbon-constrained coal and natural gas, existing and advanced nuclear, and hydrogen energy sources. In addition, standards requiring the minimum amount of electricity sourced from each of the seven tiers are specified through the year 2048. This bill sets minimum CO2 reduction standards for overall electric generation to reach 100% zero-carbon electricity generation by 2050 (including seven incremental carbon reduction targets leading up to 2050). A Zero Emissions Certificate Program (ZEC) was created through the PUC for eligible nuclear plants. Upon introduction, SB 979 was referred to the Senate Consumer Protection and Professional Licensure Committee on January 4.
• SB 872 Amending Title 27 (Environmental Resources) of Pennsylvania Consolidated Statutes outlines actions for the state to achieve 100% clean energy by 2050 and to decarbonize government operations by 2035. The bill establishes a Council for Renewable Energy Workforce Development to identify the employment potential of the energy efficiency and renewable energy industries and recommend policies to meet this potential. The bill would also create a “Renewable Energy Center of Excellence” to research energy efficiency and renewable technologies and tools to reduce carbon emissions, particularly in low-income communities. SB 872 was referred to the Senate Environmental Resources and Energy Committee on September 22, 2021, and has not yet seen a vote or hearing.
• SB 15 An Act Amending the Air Pollution Control Act defines how RGGI auction proceeds would be allocated. Revenues would be distributed as follows: 46% of total payments would be deposited into a Clean Air Fund. 56% of this allocation would go to the Greenhouse Gas Abatement, Energy Efficiency, Clean and Renewable Energy Investments Account to fund projects that reduce pollution, energy, and emissions in the state including through energy efficiency. RGGI would deposit 44% of this allocation into the Commercial and Industrial Energy Efficiency Account. 37.5% of total revenues would go to an Energy Communities Trust Fund to support communities transitioning from fossil fuel plants, including workforce development. 12.5% of total revenues would go to an Environmental Justice Communities Trust Fund to help low-income communities, reduce pollution and increase jobs. RGGI would deposit 4% of total revenues into the Clean Air Fund to administer funds. SB 15 was referred to the Senate Environmental Resources and Energy Committee on July 26, 2021.
• HB 989 An Act Establishing the CO2 Budget Trading Program would direct funds from the sale of carbon allowances sold at auction through RGGI to methods designed to achieve an emissions-free power sector in the state by 2050. This includes establishing an Energy Transition Fund to achieve electricity bill reductions for low-income residents, additional investments in environmental justice communities, and transition assistance for workers and communities affected by the closure of power plants and other energy infrastructure. The bill was introduced on March 22, 2021, and is being considered in the House Environmental Resources & Energy Committee, where it has not yet seen a vote.
• SB 199 Schools-to-Work Program awards grants to establish workforce training partnerships between schools, employers, and trade associations. Applications for the state grants must include a collaboration with at least one school and pathways to registered certifications in new careers. The bill was introduced in the Senate on February 10, 2021. It was referred to the Labor & Industry Committee, which has not yet seen a vote.
• HB 1398 Adjusted Utility Efficiency Program Spending expands utility energy efficiency investment by allowing utilities to recover decreased revenue due to reduced energy consumption through a complete revenue decoupling mechanism. (Upward rate adjustments due to a total revenue duplicating mechanism may not be more significant than 2% of rates approved in the electric distribution company’s most recent base rate case.) The bill also removes the annual limitation on total revenue electric utilities can spend on energy efficiency and conservation programs. Under Title 66 of the Pennsylvania Consolidated Statutes, the total cost of any utility energy efficiency and conservation plan may not exceed 2% of their 2006 level revenue. HB 1398 was referred to the House Consumer Affairs Committee on May 14, 2021, but has not seen a hearing or vote.
• SB 601 / HB 1185 Pennsylvania Energy and Water Efficiency Standards Act requires the Secretary of Environmental Protection to update water and energy efficiency standards for 17 product categories. Products include; commercial and residential appliances. The list consists of Air purifiers, faucets, residential ventilating fans, and water coolers. This bill authorizes the Pennsylvania Public Utilities Commission to administer and enforce the standards for the products listed. The Senate Bill was referred to the Senate Consumer Protection and Professional Licensure Committee on April 27, 2021, and the House bill was referred to the Consumer Affairs Committee on April 15, 2021.