PA Environment Digest Blog: House Committee OKs Bills To Add Energy Storage To Grid To Improve Reliability; Add Conditions For Receiving State Data Center Tax Credit; Speed Connection Of Clean Energy Generation To Grid To Help Reduce Energy Costs

On June 17, the House Energy Committee approved and reported out bills to add energy storage to the grid to improve reliability, add conditions for receiving the existing state data center tax credit and speed connections of clean energy generation to the grid to help address rising energy costs.

The bills include--

-- Procuring Grid-Scale Energy Storage: House Bill 2380 (Rivera-D-Lancaster) requiring electric utilities to set targets and procure grid-stabilizing battery energy storage was amended to increase storage requirement and make other changes and reported out by a vote of 14 to 12-- Republicans opposed;

-- Deadlines To Connecting Clean Energy Sources: House Bill 2595 (Inglis-D-Allegheny) amends the Alternative Energy Portfolio Standards Act to establish deadline requirements for the interconnection safety reviews of small-scale clean energy projects was amended to slightly increase deadlines for completing reviews and was reported out unanimously, with Republicans saying they still have concerns.

-- Adding Conditions To Receiving State Data Center Tax Credit/Nondisclosure Agreements: House Bill 2359 (Ciresi-D-Montgomery) was amended with a gut and replace amendment changing the bill to a Tax Code bill adding conditions for qualifying for the existing data center tax credit--

-- Submitting a community protection plan setting public participation and transparency requirements;

-- Submitting a project footprint report on the size of the facility, electricity generated and used, water consumption; and

-- Certifying the project has not entered into any nondisclosure agreements with local or state officials about the project.

These conditions do not apply to any data centers not applying for the state tax credit or any data centers with an electric demand of less than 10 MW.

The amended bill was reported out by a vote of 23 to 3-- Republicans were 3 no votes.

Rep. Martin Causer (R-Cameron), Minority Chair of the Committee, said he still had concerns about this bill, but voted to report it out of Committee to move the process along.

Energy Storage Bill

House Bill 2380 (Rivera-D-Lancaster) would require electric utilities to procure 3.5 GW of grid scale energy storage and does not allow the utility to actually own the storage.

The prime sponsor Rep. Nikki Rivera (R-Lancaster) introduced the bill saying-- “Pennsylvania needs to implement practical solutions that help to keep the lights on and the electric bills affordable. Battery storage is one of those solutions.

“This bill sets clear energy storage targets that will help to save electricity when it's plentiful and use it when its demand is the highest.

“That means a more reliable grid, fewer power shortages during peak periods, and greater resilience when the system is under stress.

“Battery storage can also help lower costs by reducing congestion on the grid, limiting the need for expensive infrastructure upgrades, especially when we're not using 100% of what we currently have, and cutting reliance on the costly peak power purchases.

“This bill includes competitive procurement requirements and strong oversight to ensure projects deliver value for rate payers.

“It's a smart investment in a stronger, more reliable, and more affordable energy future for Pennsylvania and for our families and businesses.”

Rep. Martin Causer (R-Cameron), Minority Chair of the Committee, said-- “This [bill] would be a very large new mandate for the electric distribution companies procuring 3,000 megawatts of storage capacity.

“The requirement that's in the bill is equal to roughly four times the capacity of Three Mile Island, the Crane Clean Energy Center [835 MW].

“I think this is a huge mandate, a very costly mandate, and I will ask for a negative vote on the amendment and the bill.”

[Note: The cost of not having a reliable grid is blackouts and grid collapse that threaten lives and businesses. The 2021 electric grid collapse caused by a winter storm in Texas cost at least $80 billion.]

Rep. Craig Willliams (R-Chester) said-- “Now, are already getting unbelievable bills from our utilities, not because our utilities are charging us necessarily more, but because there's not enough electricity on the grid as it is.

“And all of these costs would be socialized on our ratepayers, every nickel of it.”

“That's number one problem in addition to the physical impossibility that four nuclear power plants worth of batteries does not exist yet.”

[Note: Eos Energy, a Pittsburgh-based company, is building grid-scale energy storage now and just opened a second manufacturing plant in Western PA. Read more here.]

“We need to be encouraging gigawatts, gigawatts worth of new generation predominantly in Western Pennsylvania taking advantage of Marcellus shale [gas] and we are the number one electricity exporter in the country and we could double down on that right now and overnight immediately reduce our ratepayers’ bills and instead we're doing this.”

[Note: Natural gas prices fluctuate wildly in response to world and market events and Pennsylvania is locked into those prices. We generate 60% of our electricity with natural gas now. We need diversity of supply, not more cost spikes.]

Rep. Elizabeth Fiedler (D-Philadelphia), Majority Chair of the Committee, said-- “I do want to emphasize that this legislation is an important step to increasing reliability for people across Pennsylvania.

“And for anybody who has lost power, experienced a blackout, a brownout, or been afraid that that might happen, a real reality for a lot of people in Pennsylvania, this bill is directly related, directly targeted to eliminating those situations.

“And so we talk a lot about generating new energy. I do disagree with the idea that the only thing we can do is try to get more generation online.

“That is one of the things, a very, very important thing. And I think we have some other bills coming up today that I hope will help to accomplish that.

“But I think in addition to getting more generation online in Pennsylvania, an absolutely important and critical issue, we need to do everything we can to increase reliability.”

Conditions On Data Center Tax Credit

House Bill 2359 (Ciresi-D-Montgomery) had a gut and replace amendment added to put conditions on receiving the state data center tax credit.

Rep. Elizabeth Fiedler (D-Philadelphia), Majority Chair of the Committee, the sponsor of the amendment said-- “Pennsylvania currently does offer the sales and use tax exemption for data centers.

“And while many proponents talk about the fact that these facilities can bring investment and jobs to our Commonwealth, we know that as the chairman has described, there are also many concerns and this is very fast moving development in many cases.

“When a company receives a significant public tax benefit such as this, we believe that transparency and community engagement are even more critical than usual.

“And so I thank the [Rep. Ciresi] for bringing this legislation to us.

“This also ensures that government agencies cannot be bound by secrecy agreements that keep the public in the dark.

“I think that piece is important so that as you heard, folks can know what is being built in their backyard.”

Rep. Eric Nelson (R-Westmoreland) said-- “I respectfully oppose this amendment and think it is an extremely dangerous practice.

“In a sense, we are creating a bait and switch.This legislature passed a sales tax exemption for data centers and we know these data centers are coming.

“Whether they come in Pennsylvania or they come in Maryland and Virginia, they are coming.

“And the more that we sable rattle against them, our workers are going to lose the opportunity to build these facilities.

“In the West, we are repurposing thousands of blighted acres of abandoned facilities, restoring taxes for our schools, building and extending water lines, repurposing acid mine drainage to be able to use for cooling systems.

“These data centers are doing in our communities things that we were never able to achieve at all.

“And now we want to tug at the rug underneath them and tell them if you don't comply with these additional requirements that aren't placed upon them from other states, we are going to cost you millions of dollars.”

Rep. Craig Willliams (R-Chester) said-- “So they're building facilities that require seven to eight or more nuclear power plants. That's how big they are. That's how much money they're spending.

“So we're putting a bunch of requirements on data centers and a tax bill as a prerequisite for them getting a tax break, which I believe they'll say, "Take your tax break. We're good. We're just not going to comply with any of your requirements."

“[For] small data centers, this will be appreciable. Hyperscale data centers will pay no attention to this, which is why we have some in that industry not even commenting on the bill because they know they're just not going to pay attention to it because they're going to move on with their plans and not take advantage of the tax break.”

On the issue of nondisclosure agreements, Rep. Joe Ciresi (D-Montgomery) said-- “So this situation came up because it was brought to our attention that within our district where I am, they were under an NDA [nondisclosure agreement] that they could not give all the information out to the local board of supervisors.

“And one of my board of supervisors came to us and said, "Well, we can't hear everything that we need to hear. How do we really do the right thing by our community? How do we come out and tell our community what's happening if the five of us sitting here can't hear all the information?"

“Every one of us who live in a community should have a right to know who's building next to us.

“Now, I'm going to also say to your comment that it doesn't mean we stop what's happening, but you have a right to know what is happening.

“That's what local government is supposed to give us, the right to know what's happening, who's developing. So we have a say.”

Rep. Joshua Kail (R-Beaver) said-- “The Shell Petrochemical Facility was built in my district and there was a lot of early on NDAs and things.

“And it's not so much about keeping information away from the public. It's not that at all, actually.

“It's about keeping information away from competitors. It's about concern about stocks and insider trading and things of that nature.

“They want to evaluate a situation and get all of the pieces and data points on the table first before they make a final decision.

“And this not having those types of NDAs in place could potentially really scuttle it.

“I understand the concern from a community concern.

“We represent our local township supervisors to make decisions on our behalf. Those local township supervisors are getting this information and they hopefully have the discretion to make wise decisions on our behalf.”

Click Here to watch a video of the meeting.

Rep. Elizabeth Fiedler (D-Philadelphia) serves as Majority Chair of the House Energy Committee and can be contacted by calling 215-271-9190 or click here to contact. Rep. Martin Causer (R-Cameron) serves as Minority Chair and can be contacted by calling 717-787-5075 or by sending email to: mcauser@pahousegop.com.

(Photo: Pittsburgh-based Eos Energy builds utility-scale energy storage.)

Resource Links - Storage:

-- Senate DEP Budget Hearing: How Energy Storage Can Add Capacity To The Grid; Chesapeake Bay Cleanup [PaEN]

-- DEP Seeks Proposals For Electric Generation, Battery Storage To Quickly Enter Service To Feed Rising Energy Demands From A.I. Data Centers, Improve Grid Reliability, Address High Energy Costs [PaEN]

-- DEP Issues Request For Information On Proposed Electric Generation Or Storage Projects Eligible For State Sponsorship Under PJM Expedited Interconnection Track [PaEN]