PA House Sends Clean Energy, PA EDGE Tax Credits, New Fee For Electric Ratepayer Rebates Legislation Back To Senate For Action; Does NOT Repeal Data Center Tax Exemption

On October 19, the House gutted House Bill 1667 Fiscal Code bill and sent it back to the Senate with clean energy and other tax credit programs from Gov. Shapiro’s proposed PA Economic Development for Growing Economy Program and a new fee funding rebates for electric ratepayers.

The vote on the amendment was 33 to 0 and the vote on the House Floor was 193 to 10.

This version of the bill does not repeal the data center tax exemption or temporarily eliminate the  6% Gross Receipts Tax on electric bills that was in the version of House Bill 1667 the Senate sent to the House prior to this action.

The House has passed repeals of the data center tax exemption in House Bill 2198 and House Bill 2224, but did not include it in this version of House Bill 1667.

The Senate now has two scheduled voting days-- October 20 -21-- before the election to consider taking action on this bill or amending it.

Click Here for the House Fiscal Note and Summary.

The new version of House Bill 1667 has these provisions--

-- Energy Ratepayer Protection/Rebate Fee: A new fee of $0.02 per kilo-watt hour to be paid by energy consumption taxpayer of energy consumed by an entity subject to Personal Income Tax or Corporate Net Income Tax, who owns a building or a group of buildings, and consumes at least six megawatts of energy in this commonwealth. 

Fee would be deposited into the newly created Energy Ratepayer Protection Fund with deposits distributed to energy ratepayers as part of a one-time annual rebate. 

The Public Utility Commission and the Dept. of Revenue are tasked with determining the amount of the actual rebate, which would be a function of the amount deposited into the Energy Ratepayer Protection Fund.

The PUC is required to issue rebates to energy payers no later than 120 days from the end of each fiscal year and be accompanied by a notice to energy ratepayers. 

The PUC is also required to publish a report by March 30, 2027, and each year thereafter, which shall include energy usage by energy consumption taxpayers during the preceding calendar year. This provision would be effective starting January 1, 2027.

-- Residential Clean Energy Tax Credit: Defines an eligible taxpayer as an individual subject to Personal Income Tax (PIT) who owns a homestead and owns, installs, and places in service a residential clean energy system, energy storage technology, solar water heating system, or small wind energy system during the applicable time period.

-- The credit is limited to $3,000 per homestead;

-- Credit is not eligible for a carry forward, carry back, sale or assignment;

-- The credit is refundable if it exceeds the eligible taxpayer’s PIT liability and is capped at $34.7 million per fiscal year; 

-- Administered by the Department of Revenue ;  Requires that a report be submitted to the General Assembly annually; and, 

-- The credit is effective as of December 31, 2026. There is no expiration.

-- Advanced Clean Manufacturing Tax Credit (PA EDGE): Defines an eligible project as a facility where clean steel/aluminum/cement/glass/iron, or electric grid modernization equipment, or energy-efficient heat pumps/turbines are being manufactured;

-- The credit is eligible to be carried forward for up to 5 years and can be sold or assigned. 

-- A qualified taxpayer is eligible for a credit of 30% of qualified production costs up to a maximum of $5 million;

-- There is an annual cap of $20 million and credits can be recaptured if received through fraud or misrepresentation;

-- Administered by Revenue in consultation with the Department of Community and Economic Development (DCED) and the Department of Environmental Protection (DEP); and,   This provision expires December 31, 2035.

-- Baseload Energy Tax Credit (PA EDGE): Credit can be awarded to a qualified new baseload generation project that:

-- Plans to generate minimum of 500 megawatts (MW) of electricity using dry natural gas, o Is accompanied by an investment in minimum generation capacity of 50 MW of solar electricity and minimum capacity of 50 MW of energy storage;  

-- Makes a capital investment of $1 billion to construct/place facility into service;

Has at least eight years of electricity generation;

-- Is located on abandoned mine lands or as a contaminated commercial/industrial site

-- Has not entered into, or does not plan to enter into, a power purchase agreement with the owner or operator of a commercial data center

-- Commits to offer the full generation capacity into the capacity market and participates in the PJM Interconnection, LLC, or its successor entity, for the life of the tax credit and does not serve a commercial data center through co-location, behind the meter connection, or common ownership

-- To be administered by the Dept. of Revenue;

-- The credit has an annual cap of $32 million. Qualified projects are eligible for a maximum credit of $16 million;

-- The legislation provides for recapture of the tax credit if it is determined that credit was obtained through fraud or misrepresentation;

-- Requires the submission of an annual report to the General Assembly; and,

-- Provision shall apply from January 1, 2031, through December 31, 2056.

-- Nuclear Energy Manufacturing Tax Credit (PA EDGE): Eligible project facility is defined as one engaged in component manufacturing/distribution of an advanced nuclear reactor or the design/testing/training/engineering or fuel assembly related to advanced nuclear reactor;

-- Can be applied against up to 20% of an eligible taxpayer’s tax liability;

-- Tax credit cannot be carried back or forward, or used to obtain refund;

-- Allows the sale or assignment of a tax credit, upon approval;

-- A purchaser of the tax credit may not sell/transfer/assign a purchased tax credit

-- Includes an annual cap of $15 million in tax credits;

-- Requires a capital investment of at least $250 million;

-- The credit is effective beginning January 1, 2028, through December 31, 2044.

-- Regional Clean Hydrogen Hubs Tax Credit (PA EDGE): Amends the definition of Clean Hydrogen5 to be defined as hydrogen produced through a process that results in lifecycle greenhouse gas emissions rate of less than 4 kilograms and adds a new Lifecycle greenhouse gas emissions definition;

-- To be administered by the Department of Revenue;

-- Expands area of operation to any location within the commonwealth;

-- Capital investment requirement is lowered to $100 million (currently $500 million);

-- Job creation requirement is lowered to 200 positions (currently 1,200);

-- Annual credit cap is lowered to $5 million (currently $50 million)

-- Updates how the tax credit is calculated for each kilogram use

 Click Here for the House Fiscal Note and Summary.

[Posted: October 20, 2026]   PA Environment Digest