Pennsylvania is well on its way to reducing usage and developing an indigenous energy industry to create new jobs and a stable price environment in which both commerce and the residential sector can flourish.
With continuing price volatility and future supply uncertainty, one of the Administration's top priorities has been to develop an environmentally responsible energy strategy which will assure the Commonwealth's future economic vitality. By reducing usage and developing clean, indigenous sources of supply, the Governor is setting a course to stem the loss to the state's economy of $30 billion spent on imported fuels, stabilize costs for both industrial and residential consumers, and create jobs in a new alternative energy sector.
The foundation was laid with passage late in 2004 of the Commonwealth's Alternative Energy Portfolio Standard, which requires 18 percent of all power delivered in Pennsylvania to come from clean, renewable sources by 2020. State government has just demonstrated its own commitment by making the nation's largest voluntary state purchase of green electricity, doubling it to 200,000 MWh, 20 percent of the Commonwealth's electrical load. The Public Utility Commission, in collaboration with the Department of Environmental Protection continue developing the comprehensive regulations necessary to implement the standard, including net metering and interconnection protocols. The Commission has also begun hearings to consider measures for maintaining price stability as the generation rate caps are lifted between now and 2010.
At present, the Commonwealth has 153 MW of wind generation installed and a further 1,000 MW are planned. Equally importantly, the industry is striking roots here, most recently with the Spanish wind giant, Gamesa, already headquartered in Philadelphia, investing $84 million in four manufacturing plants which will bring approximately 1,000 new jobs to Pennsylvania. Helping to promote clean alternative energy development, the Commonwealth's Energy Harvest grant program
and the recently reactivated Pennsylvania Energy Development Authority are providing financial incentives. To date their joint investment of $31 million to leverage private investment of $243 million.
Pennsylvania's portfolio standards are unique in promoting indigenous sources of generation by including clean coal technologies, such as integrated gasification combined cycle and coal liquefaction. It was also the first standard to incorporate energy efficiency and conservation. To lead the way, the Governor issued executive order 12-04 requiring all state agencies to reduce energy usage. Building energy usage has been reduced by 8%. The state fleet reduced 1,000 vehicles, will tend towards smaller vehicle purchase and work toward a goal of 25 percent vehicle purchases being hybrids by 2011. The Guaranteed Energy Savings program has been streamlined. Twenty-eight major building retrofits will return major energy savings to seven agencies and cover the capital costs out of the savings. The first seven projects to be completed will save taxpayers $59 million on a capital outlay of $42.5 million. Future energy bills will be reduced by specifying stringent performance goals for new construction. Out of the 38 high performance green buildings in Pennsylvania certified under the US Green Building Council's LEED® rating system, nine are occupied by state agencies, an increase of four from 2005.
However, electricity generation is only half of the energy picture, the other half being liquid fuels, addressed recently by the Governor's PennSecurity Fuels Initiative. Pennsylvania has abundant agricultural resources as well as reserves of both new and waste coal. Over the next decade the fuels initiative aims to replace 900 million gallons of the state's liquid fuels with alternative sources, such as bio-based ethanol and biodiesel and fuels derived from coal liquefaction processes equipped with carbon offsets. The nation's first coal liquefaction plant is under development for Schuylkill County, turning environmentally damaging waste coal into 40 million gallons of transportation or heating fuel and generating enough electricity to power 40,000 homes. The initiative would also establish a clean fuels "standard", requiring that a certain percentage of transportation fuels sold at retail in Pennsylvania contain eligible renewable fuels, and invest $30 million from the state's Alternative Fuels Incentive Grant program over the next five years to build re-fueling and production infrastructure to support the standard. The private sector has already responded with the opening of the state's first public biodiesel filling station and biodiesel blending facility as well as the Northeast's first public ethanol pumps. The Commonwealth is responding by letting its first bio-based heating fuel contract to be followed shortly by a similar transportation fuel contract.
Spiraling energy costs and the instability of fuel supplies
are challenging the nation to find innovative ways to meet its energy needs. Pennsylvania is well on its way to reducing usage and developing an indigenous energy industry to create new jobs and a stable price environment in which both commerce and the residential sector can flourish.