HARRISBURG, Pa. — On Thursday, Governor Josh Shapiro announced his intention to expedite significant energy projects in Pennsylvania, along with offering substantial tax incentives aimed at ventures that contribute power to the grid and produce hydrogen. This declaration comes just days before Shapiro presents his third budget proposal to the state’s lawmakers, amid a pressing energy shortage poised to impact electricity prices throughout Pennsylvania, the second-largest natural gas-producing state in the country.
Shapiro, representing the Democratic Party, emphasized a need for Pennsylvania to embark on “the next chapter in the state’s extensive energy legacy” to remain competitive with other states drawing in monumental projects, including data centers and electric vehicle manufacturing facilities. “It’s time for Pennsylvania to enhance its competitiveness; we must take bold and definitive actions now to cultivate new energy sources,” Shapiro stated during a news conference held at the Pittsburgh International Airport.
Highlighting that Pennsylvania is among just 12 states lacking an entity to expedite energy project siting, Shapiro proposed forming the Pennsylvania Reliable Energy Siting and Electric Transition Board, which would facilitate faster permitting and support for innovative energy initiatives. “We need to initiate construction immediately, rather than postponing it for years,” he insisted.
The tax incentives being suggested by Shapiro target large-scale projects involved in generating electricity, hydrogen, and sustainable aviation fuel. According to his proposal, a power facility could be eligible to receive tax credits of up to $100 million annually for three years, although specifics regarding which power plants would qualify were not detailed by his administration. Additionally, a hydrogen producer could obtain up to $49 million each year, and those producing aviation fuel could garner up to $15 million annually.
These proposed initiatives will likely require legislative approval, with some Republican lawmakers expressing opposition to Shapiro’s energy agenda. They argue that his policies could hinder Pennsylvania’s ability to attract companies interested in developing new large-scale natural gas power facilities.
One project that Shapiro highlighted for assistance is the initiative from CNX Resources, a natural gas producer, which proposes establishing a $1.5 billion facility at Pittsburgh’s airport focused on creating hydrogen-based fuel. However, CNX has stated that their commitment to the project hinges on whether the federal government allows coal mine methane to qualify for tax incentives central to the previous administration’s climate change strategy.
The accelerating demand for energy driven by the burgeoning sectors of cloud computing and artificial intelligence has led to a thirst for power-intensive data centers, which require substantial energy to maintain their servers, storage, networking gear, and cooling systems. This demand surge has generated proposals to revive nuclear power plants, develop small modular reactors, and establish large-scale renewable energy installations or new natural gas facilities.
Nonetheless, this growing need for energy faces challenges as the power supply is already under strain due to ongoing efforts to transition away from environmentally harmful fossil fuels and the decommissioning of aging nuclear power stations. Recently, both Shapiro and state ratepayer advocates have urged the mid-Atlantic electricity grid operator to lower the payment rates offered to power plant owners, warning that failure to do so will unjustifiably inflate electricity costs across the entire region.
