Governor Josh Shapiro and the Pennsylvania General Assembly reached a significant agreement on the state budget last month, ending a prolonged deadlock that lasted 135 days. The resolution has generated a sense of relief across the state as funding for critical government services is now secured. However, as the end of 2025 approaches, it is imperative for Pennsylvania to confront pressing energy challenges that threaten both affordability and reliability.
The Pennsylvania Environmental Council has advocated for the state’s participation in the Regional Greenhouse Gas Initiative (RGGI), which was ultimately excluded from the final budget deal. This program was seen as a vital step toward addressing the commonwealth’s energy issues, particularly in light of the increasing demand from new data centers and the backlog of electric generating projects waiting for grid access. These factors contribute significantly to rising electricity bills, which are expected to escalate further.
The recent capacity auction conducted by PJM Interconnection, which manages the electricity grid serving Pennsylvania and 12 other states, has revealed alarming trends. Consumers are now facing the third consecutive record-breaking increase in electricity costs. Prior to this increase, existing ratepayers had already incurred an additional $16.6 billion in electricity prices for the 2026-27 auction, largely due to the burgeoning demand from data centers.
Urgent action is needed to address these energy challenges. The benefits of RGGI’s cap-and-invest framework cannot be realized through a single policy; rather, a multifaceted approach is essential. Proposals currently under consideration in Harrisburg could significantly improve energy affordability, reliability, and emissions standards.
The top priority should be the Pennsylvania Reliable Energy Sustainability Standard (PRESS), which seeks to modernize the state’s outdated Alternative Energy Portfolio Standards. This initiative is designed to diversify Pennsylvania’s energy sources while reducing carbon emissions, and it has been supported by the Pennsylvania Environmental Council for nearly two decades.
In addition to PRESS, other elements of Governor Shapiro’s Lightning package include updates to the state’s energy efficiency programs, authorization for community energy projects, and improvements to the siting process for new generation facilities. Concurrently, legislative proposals in the House aim to facilitate the deployment of next-generation nuclear power and to provide tax credits for manufacturers that invest in energy efficiency upgrades.
These measures also encompass initiatives to enhance energy storage capacity and modernize transmission systems, which will alleviate grid congestion and streamline energy delivery. Furthermore, exploring new energy technologies, such as advanced geothermal systems, is vital to building a skilled workforce equipped for future energy opportunities.
The goals outlined are achievable by 2026, but without significant changes to current practices, Pennsylvania risks falling behind in the energy sector. Rising energy demands and costs, along with increasing emissions, underscore the necessity for a comprehensive energy policy.
It is crucial for the government to lead in crafting policies and incentives that will foster innovation and sustainability within the state’s energy landscape. A robust energy policy could align economic growth with environmental stewardship, benefiting both the economy and the residents of Pennsylvania.
As the state looks toward a clean energy future, it is essential to prioritize actions that will mitigate rising energy costs and address the impacts of climate change. Pennsylvania has the potential to be at the forefront of energy innovation, but decisive action is required to realize this vision.
The time for action is now; 2026 must mark a turning point in securing a prosperous and sustainable energy future for all Pennsylvanians.
