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Senate of Pennsylvania
Session of 2019 - 2020 Regular Session

MEMORANDUM

Posted:	April 27, 2020 11:05 AM
From:	Senator Thomas H. Killion and Sen. Daniel Laughlin
To:	All Senate members
Subject:	Job Stimulus and Economic Development Growth Through Energy

Given our current economic crisis due to COVID-19, in the near future, we plan to introduce legislation that would take advantage of a large economic development opportunity to attract millions of dollars of private investment; grow tens of thousands of jobs; create tax revenue for communities; diversify our energy mix; and present a solution that may save some of our farms without the use of state revenues – through the commonsense expansion of renewable energy. Unfortunately, in 2019 alone, Pennsylvania lost more than 5,000 farms. We believe renewable energy development presents a unique opportunity for farmers to receive annual payments for leasing a portion of their land to renewable energy development for 20 years or more; while providing reliable income by planting pollinator-friendly crops that enhance productivity of the adjacent farmlands. Distributed generation (e.g. solar on rooftops) also allows businesses, non-profit organizations, churches, municipalities and homeowners to reap long-term electric bill savings from solar. Creative financing allows them to install solar with little or no money upfront and realize thousands of dollars of savings over the lifetime of the system. Alternative energy credits (AECs) help to make this financing work better and faster for both large scale and distributed renewables. AEC trading is a market-based program that drives investment into renewables based on supply and demand – as the goal rises, the industry brings investment to build and meet that goal. When the goal is met, investment slows. Pennsylvania is on track to surpass its goal for renewable energy under the current Alternative Energy Portfolio Standards (AEPS), which drives AEC pricing. The program flat-lines in May 2021 and without an adjustment to this law, Pennsylvania will miss the economic development that other states are experiencing.  Most surrounding states are out-competing Pennsylvania. Delaware, Maryland, New Jersey, New York and most New England states have goals of 50% by 2030. On April 12, 2020, Virginia enacted a law for 100% clean energy by 2050. Our legislation would propose the following: A more modest increase in Pennsylvania’s AEPS Tier I goal – 18% by 2025 - that will still spawn new investment and create jobs while minimizing impacts to all electric customers; Require 3.75% (of the 18%) comes from in-state grid-scale solar (i.e., projects greater than 5 MW) and that 1.75% comes from in-state distributed solar (i.e., rooftop solar projects that are connected to the distribution grid); and Limit the cost of the AECs and provides for long-term contracting – minimizing impacts to ratepayers - and calls for a study of renewable energy storage. Pennsylvania needs to diversify our energy mix and a modest increase in the AEPS Tier 1 can do that while creating considerable economic growth – without depleting state revenues. We must build upon the successful efforts we have had in the past; and we believe strongly that this proposal could be one of the largest economic development and job stimulus bills in decades. Please join us in co-sponsoring this important legislation.

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