A state authority established to finance energy projects in the wake of the oil shortages of the 1970s could help Pennsylvania capture more of the Biden administration’s historic investments in clean energy and job creation.
Legislation in the state House would reform the Pennsylvania Energy Development Authority (PEDA) to allow Pennsylvania to take advantage of hundreds of billions in federal funding for clean energy projects under the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law (BIL).
House Bill 2338, introduced by state Rep. Elizabeth Fiedler (D-Philadelphia), would modernize PEDA to allow it to own energy projects, which is a requirement to receive federal tax credits under the Inflation Reduction Act. The bill was approved unanimously Tuesday in the House Consumer Protection and Utilities Committee despite one lawmaker’s concern about public ownership of energy assets.
Fiedler said Tuesday that the legislation would promote climate friendly energy, lower utility costs and create well-paying union jobs.
“If we are serious about bringing our money back from D.C., if we want to maximize these federal investments, and if we want to work together to put Pennsylvanians to work, I believe we have to figure out how to get projects financed and built and PEDA is one great way we can make that happen,” Fiedler said in a June 3 hearing on the bill.
PEDA Chief Operating Officer Geoffrey Bristow said during the hearing that about 70% of the $780 billion available through the IRA are tax credits, which the law makes available to government entities for the first time ever.
But the credits are available only to the owners of energy projects and when the Legislature and Gov. Dick Thornburgh created PEDA in 1982, it was permitted to own projects only under rare and specific circumstances, Bristow said.
H.B. 2338 would expressly give PEDA the authority to own energy projects. Bristow said that would allow PEDA to bring IRA funding into Pennsylvania while spurring private investment by eliminating much of the risk.
One example Bristow provided is that PEDA could provide lease financing for clean energy projects by providing the capital upfront and retaining ownership of the project while leasing it to an operator. That would allow PEDA to receive tax credits worth 30% to 70% or more of the project costs. That money could then be used to finance additional projects.
Robert Bair, president of the Pennsylvania Building and Construction Trades Council noted that six other states have similar pending legislation to capture IRA and BIL funds. He added that the funding could be used to pay for a wide range of carbon neutral energy projects including hydroelectric, carbon capture, coal gas and modular nuclear reactors.
“That all has the same end goal to limit greenhouse gas emissions while creating a whole lot of good paying middle class jobs,” Bair said.
State Rep. Craig Williams (R-Delaware) said before Monday’s committee vote that he would vote for H.B. 2338 to advance it to the floor where he plans to offer amendments.
“I’m not interested in a government instrumentality being in the market share for electricity generation when our Commonwealth is one of the greatest exporters of electricity in the nation,” Williams said.
Fiedler said she expects the bill to be considered by the full House later this month.