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PA House Republicans Introduce Bill Creating An Energy Advocate With Power To Veto Any Action By Any State Agency That Harms Energy Reliability, Affordability

On September 19, Rep. James Struzzi (R-Indiana) introduced House Bill 2573 establishing an Independent Energy Office headed by a new Energy Advocate with the authority to veto any regulation, policy or action of any state agency that “may harm energy reliability and affordability.”

The new Energy Advocate and Energy Office would be housed within the Independent Regulatory Review Commission, a five-member Commission that now reviews state agency regulations.

The bill says the Energy Advocate would be appointed by the Consumer Advocate in the Office of Consumer Advocate, an independent agency within the Office of Attorney General, for a five year term, subject to confirmation by the state Senate.

This bill is part of a nine-bill package of House Republican bills announced on March 26 they said are meant to address energy affordability. Read more here.

New Energy Advocate

Under House Bill 2573, the new Independent Energy Office would be charged with “protecting the reliability and affordability of the electricity grid within this Commonwealth and promoting the use of energy produced in this Commonwealth.”

The Office would “evaluate regulations, policies, documents and actions of an agency for the purpose of determining whether the actions may harm energy reliability and affordability within this Commonwealth.”

The term “agency” is defined to include “any department, departmental administrative board or commission, independent board or commission, agency or other authority of this Commonwealth now existing or hereafter created.”

Agency does not include the General Assembly or any court, political subdivision, municipal or local authority.

Independent commissions and boards include, for example, the Public Utility Commission, the Independent Regulatory Review Commission and the Environmental Hearing Board.

Although the term “action” is not defined in the bill, it is a broadly understood term that can certainly include any individual permit or approval decision, compliance or enforcement action taken by an agency or a decision on an appeal.

If the Office finds a state agency takes an action that may harm energy reliability and affordability, it can “request that the agency reverse the action.”

“If the agency does not reverse the action to the satisfaction of the Office, the Office may reverse or block the action of the agency,” according to the legislation.

The legislation provides no mechanism to appeal or review the decisions of the Energy Advocate.

The legislation was referred to the House Consumer Protection, Technology and Utilities Committee.

Other Bills In Package

Only one other bill in the nine-bill package to be introduced so far is House Bill 2526, also by Rep. Struzzi, that requires agencies to submit an analysis of the impact of a proposed regulation on electricity costs and its “negative impact on low-income residents” as part of the review by the Independent Regulatory Review Commission.

This bill was also referred to the House Consumer Protection, Technology and Utilities Committee.

The other bills announced as part of the package in March, but not yet introduced were--

-- Rep. Aaron Kaufer (R-Luzerne): A bill to “repurpose money from Act 129 [utility energy efficiency programs] of 2008, which expanded the Public Utility Commission’s oversight responsibilities, to redirect unused dollars for energy efficiency and conservation programs.”

-- Rep. Jonathan Fritz (R-Wayne): A bill “to create an Independent Energy Advocate within the Department of Environmental Protection, which would weigh in on any DEP action impacting Pennsylvania’s energy portfolio.”

-- Rep. Mike Cabell (R-Luzerne): A bill “modeled after a 529 Plan or a Health Savings Account to permit energy bills to be paid with pre-tax dollars.”

-- Rep. Joe Hogan (R-Bucks): A bill to “extend the Property Tax/Rent Rebate Program to account for utility costs in determining the amount of relief provided to claimants within the current income eligibility and rebate amount parameters.”

-- Rep. Clint Owlett (R-Tioga): A bill “proposing to re-name the Department of Environmental Protection to the Department of Energy and Environmental Services to further reflect the needs and level of service to communities.”

-- Rep. Eric Nelson (R-Westmoreland): A bill “to allow former, now-shuttered energy production facilities to be eligible to be designated as Keystone Opportunity Zones, which will incentivize the redevelopment of these locations.”

-- Rep. Joe Hamm (R-Lycoming): A bill “to direct the entrance of Pennsylvania into a power-exporting state consortium within the PJM Interconnection, a regional transmission organization (RTO) that coordinates the movement of wholesale electricity in parts of Pennsylvania and 12 other states, as well as the District of Columbia.”

Click Here for a copy of the March announcement.

Rep. Robert Matzie (D-Beaver) serves as Majority Chair of the House Consumer Protection, Technology & Utilities Committee and can be contacted by calling 717-787-4444 or sending email to: rmatzie@pahouse.net. Rep. Jim Marshall (R-Beaver) serves as Minority Chair and can be contacted by calling 717-260-6432 or sending email to: jmarshal@pahousegop.com.

Additional Background

Pennsylvania’s electricity generation lacks the stability and lower costs brought by diversity in our fuel mix. We depend on one fuel to generate 59% of our electricity-- natural gas-- followed by nuclear power-- 31.9%, coal-- 5.4% and 3.7% from other sources. Read more here.

The price of that fuel is set by foreign markets and is heavily influenced by the whims of adversarial nations and dictators. Read more here.

Energy facility investors are moving in a big way to renewables + storage to bring lower prices, stability and reliability to the regional electric grid. Read more here.

Most of the 38,000 MW of electric generation already approved by the PJM Interconnection for connection to the electric grid is renewables and energy storage. Read more here.

The dramatic spikes in natural gas cost as a result of the Russian war in the Ukraine and international markets now setting the price of gas in Pennsylvania are still being felt in Pennsylvania’s electricity rates, as the Public Utility Commission has repeatedly warned electricity consumers. Read more here.

Currently, in spite of low prices for natural gas, Pennsylvania customers of natural gas utilities are still seeing increases in their rates, for example, Peoples Natural Gas customers will have a 12% increase in their bills, with more coming. Read more here.

In addition, Pennsylvania natural gas producers like EQT, CNX Resources, Coterra Energy, Chesapeake Energy and many others have been deliberately cutting back production-- EQT alone by 1 billion cubic feet per day-- in an attempt to raise natural gas prices.

From August 23 to September 20, Baker Hughes reported the number of shale gas drilling rigs in Pennsylvania dropped from 21 to 14-- a 33% decline.

Marcellus Drilling News reported on September 10 Coterra Energy has pulled all its active shale gas drilling regs from Susquehanna County until natural gas prices ‘recover.’ Read more here.

On September 24, Bloomberg reported a top investor in US oil and natural gas companies says shale producers are also no longer in position to ramp up output to give consumers a break on energy prices.

On September 19, Utility Dive reported the North American Electric Reliability Corp issued a statement that it "remains concerned about maintaining sufficient natural gas supplies to address extreme winter conditions."

The NERC includes regional electricity grid operators like the PJM Interconnection covering Pennsylvania.

In July, the PJM Interconnection auction for wholesale electricity generation capacity to be delivered in 2025-26 resulted in a 933% increase in electricity costs over 2024-25. Read more here.

PJM said one of the factors in raising prices was improved risk modeling for extreme weather and accreditation that more accurately values each resource’s contribution to reliability.

In plain language that means accurately factoring in the potential unreliability of natural gas, among other factors, on which we depend for 59% of our electric generation.

The next PJM auction is in December. Read more here.

Between 75% and 80% of the shale gas produced in Pennsylvania is used outside the state and exported to other countries. Read more here.

In November, Pittsburgh-based EQT Corporation, the largest producer of natural gas in the US, relaunched its "Unleash” LNG Exports initiative that argued the US "has a duty to provide” natural gas to countries like China because they don't have natural gas of their own. Read more here. Read more here.

On February 28, Ohio US Senator Sherrod Brown and Oregon US Senator Jeff Merkley introduced the Protecting American Households from Rising Energy Costs Act, legislation that would ban the export of crude oil or liquefied natural gas (LNG) to our biggest adversaries: China, Russia, Iran, and North Korea. Read more here.

LNG gas export capacity will double by 2028 resulting in a harder link to international markets and often higher prices with its resulting impacts on Pennsylvania consumers. Read more here.

NewsClips:

-- Bloomberg: Top Investor In US Oil, Gas Companies Says Shale Producers No Longer In Position To Ramp Up Output To Give Customers A Break On Energy Prices

-- Reuters: US Natural Gas Prices Jump 7% On Possible Hurricane Worries In Gulf Of Mexico

Are We Going To Have Enough Gas?

-- Utility Dive: North American Electric Reliability Corp Sounds Alarm Over Maintaining Sufficient Winter Natural Gas Supplies To Address Extreme Winter Conditions; PA Gas Producers Cutting Production, Pulling Drill Rigs [PaEN]

-- Utility Dive: PJM Is Blocking Battery Storage Interconnection Pathway That Could Unlock ‘Tens Of Thousands Of Megawatts’ Of Additional Capacity For The Grid

-- Baker Hughes: PA Natural Gas Drilling Rigs At 14, Same As Last Week - Down 33% Since Aug. 23 [Industry Efforts To Increase Natural Gas Prices Continue]

Resource Links - Electric Grid:

-- Pennsylvania’s Electric Grid Is Dependent On One Fuel To Generate 59% Of Our Electricity; Market Moving To Renewables + Storage [PaEN]

-- Guest Essay: Pennsylvania May Not Be Able To Keep All The Lights On In Four Years - By Terry Fitzpatrick, Energy [Utilities] Association of PA

-- PJM Makes Multiple Reliability-Focused Improvements To Prepare For Winter To Deal With 70% Natural Gas, Other Generator Nonperformance In 2022 [PaEN]

-- PJM Reports Natural Gas Power Plants Were Over Half The Forced Outages During Winter Storm Gerri In January; Special Procedures Used For Gas Generators Raised Questions About Market Impacts [PaEN]