Energy, Environmental Legislation Expected to Get Spring Attention
Several pieces of alternative and renewable energy legislation are expected to get consideration by the General Assembly when they return to session in March. Governor Rendell has placed a priority on passage of HB 80, legislation that would significantly increase the required renewable energy share of electric generation in Pennsylvania. To date, the Administration and sponsors have been unable to secure a majority of the House willing to support the bill as drafted. A significant number of amendments are expected, on subjects ranging from inclusion of nuclear power and residual waste/ municipal waste to energy projects to amendments dealing with dual fuel generation, energy conservation and coal fired systems.

Legislation amending the Department of Agriculture for the Biofuel Development and In-State Production Incentive Act of 2008 has passed the Senate and is in the House Appropriations Committee. With the May 1 inception of a B2 biodiesel blend mandate coming quickly, there is pressure to get this legislation passed to provide enforcement by the PA Department of Agriculture. Amendments to mandate diesel for off road use and home heating fuels contain at least 5% biodiesel in 2011 and 10% in 2013, require all home heating oil to contain no more than 15 ppm of sulfur (Ultra Low Sulfur Diesel), and permit PDA to assess fees for all companies regulated to cover expenses of enforcement are expected in the House.

Governor Rendell has now said he supports legislation to limit electric rate increases as caps come off in 2010 and 2011. House Speaker Keith McCall's HB 20 would allow consumers and small businesses to get phase-ins of such rate hikes, and pressure is rising from areas where caps come off next year to protect consumers against increases of 20-50%. The Public Utility Commission has said such legislation is unnecessary (see story below).

The Senate Environmental Resources and Energy Committee has scheduled a hearing March 9 to consider a series of bills that would further regulate gas drilling and coal mining. We expect much activity in these areas during the 2010 session, as the Governor's proposal for a severance tax on natural gas extraction puts additional importance on this industry.

House Environmental Resources and Energy Chair Bud George continues to push for full House consideration of HB 1909, which would create an office of Commonwealth Energy Advocate, a Pennsylvania State Power Authority which could grant and loan funds for electric generation and sign PPAs on behalf of companies/the Commonwealth.

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