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For Immediate Release
January 22, 2008
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A Sensible Plan on Alternative Energy and Bio-Fuels

By Senator Mary Jo White

Last July, Senate Republicans agreed to take a close look at a variety of alternative energy and bio-fuels proposals, including those put forth by Governor Rendell.  But we insisted that any proposals be evaluated on their own merits – not under threat of a government shutdown.

As part of this effort, Governor Rendell convened a special session on energy in September.  Several notable bills, which address investments in alternative energy and increased production of biodiesel, recently passed the Senate with strong, bi-partisan input and support.

Senate Bill 1 authorizes spending $650 million over 10 years through a combination of grants, loans and tax-credits.  Up to $250 million may be borrowed through the Commonwealth Financing Authority – more borrowing than some members wanted, less than others wanted.  There was little support for borrowing $850 million as proposed by the Governor – an amount that would be funded with a tax on consumer's electric bills and exhausted in just three to four years. 

Under the Senate plan, residents, businesses, schools and local governments would be eligible for funding for projects which use alternative and renewable energy sources and increase energy conservation and efficiency.  Consumers –homeowners, small businesses and larger commercial enterprises – would finally have access to financial assistance to install systems using solar, geothermal, wind, biomass and other renewable energy.  Additionally, $130 million in tax credits would be available for businesses which incorporate renewable energy into their manufacturing or production processes.  With energy costs a major component of any business' bottom line, such changes can lead to significant savings.

We also set aside seed money to assist the Ben Franklin Technology Development partners.  The partners have a proven track record of turning today’s good ideas into tomorrow's realities, and there are a lot of good ideas out there that could benefit from a little financial encouragement. 

Low-income residents would also see an infusion of $100 million into home energy assistance funding, as well as a revolving loan fund administered by the Housing Finance Agency to expand energy efficiency and weatherization.   As the saying goes, the cheapest energy is the energy you don’t use.  We have an aging housing stock in Pennsylvania, and many residents would benefit from new windows and doors, air ducts, vents, insulation and other energy-efficiency improvements.

The Senate plan does not include Governor Rendell's proposal to enact a new $70 million annual tax on electric users.   Instead, we use the anticipated growth in the Commonwealth's gross receipts tax revenue.  With energy costs expected to go up regardless of what plan ultimately passes, it is imperative that the Commonwealth live within its means.

There has been some criticism regarding a provision to assist small power plants meet expensive new federal and state pollution control upgrades.  This criticism is shortsighted.  Coal provides about 60% of the electricity we use, and will for the foreseeable future.  The large generators have already installed these controls.  If the business decision is made not to retrofit the small marginal plants we could lose 10% of our generating capacity just as the rate caps come off, further driving up prices. 

The Senate also took a major step forward to develop our fledgling biodiesel industry.  Under Senate Bill 36, all diesel fuel offered for sale in the Commonwealth will be required to contain escalating amounts of biodiesel. 

To protect consumers the bill requires that engine warranty protections and adequate infrastructure be in place before any mandates take effect.  Additionally, the mandated-content triggers are set at more modest levels than those contained in the House-passed version – ensuring that we do not inadvertently pass legislation which would require us to import our biodiesel fuel. 

Senate Bill 22 provides up to a 75¢ per gallon incentive for biodiesel production.  It expands the alternative fuels incentive rebate program to other alternative-fueled vehicles and increases outreach efforts to make car dealers and consumers aware of the program. 

Energy independence is probably a misnomer – no feasible plan will entirely reduce our dependence on energy sources from outside our Commonwealth – but we can do our part to make Pennsylvania less dependent on unstable foreign sources while providing incentives for the Commonwealth’s agricultural community. 

Working with the House of Representatives and Governor, we can ensure that Pennsylvania is guided by a responsible energy policy that meets the needs of our residents.

Senator Mary Jo White (R-21) is the Chairman of the Senate Special Session Committee on Energy Policies.  Learn more about the Committee at www.senatormjwhite.com (choose "Special Session on Energy").