Governor Josh Shapiro’s recent letter to utility companies comes as policymakers across the country are changing course after seeing the energy bills hitting consumers because of their short-sighted energy policies. In states long known for aggressive climate targets, including New York and California, Democratic leaders are shifting away from their climate policies to instead prioritize affordability.
Rather than learning from the mistakes of his neighbors, Governor Shapiro’s letter indicates he may be headed down the same path of high prices at a time when Pennsylvania should continue to promote energy investment.
What’s Driving the Affordability Crisis
As New England, New York, Connecticut, and California face rising energy prices, elected officials are scrambling to reverse decades of anti-energy policy decisions that have contributed to the problem. A new report from the U.S. Chamber of Commerce shows how electricity prices have been rising across the country over the past five years. The regions where consumers are paying the most? The Northeast and the West Coast, thanks to a combination of factors including limited natural gas infrastructure and overly ambitious climate goals.
For example, opposition to building pipelines in the Northeast has stifled necessary energy infrastructure in the region, subsequently leading to higher natural gas electricity prices. Policy decisions have also contributed to the premature retirement of reliable power plants in the mid-Atlantic, the opposite of what the region needs as electricity demand rises for the first time in decades.
Now that states are seeing the price tag for those policies, they’re changing course. New York Governor Kathy Hochul recently announced plans to roll back the state’s 2019 landmark climate law amid concerns over costs and feasibility. In neighboring New Jersey, a long-disputed gas pipeline finally received a permit.
What Can Pennsylvania Actually Do to Avoid the Same Issues
Streamlining permitting reform and easing barriers to developing new projects will help lower costs and attract investment where it’s needed most. Obtaining permits for construction or developing other projects in Pennsylvania continue to be costly and time-consuming. The result? Projects cost more while investment and job growth can be pushed to other states.
As the third-largest producer and the largest exporter of electricity in the United States, Pennsylvania relies heavily on natural gas to provide affordable power and heating. According to the U.S. Energy Information Administration, natural gas-fired power plants supplied 59 percent of the state’s generation.
Pennsylvania and its policy makers should be focused on bringing new investments to the state to ensure that the natural gas systems it relies on are reliable, safe, and affordable.
What is not helpful are wild political swings every four years that deter long-term investment in projects that can take years to permit, site, and build. Those decisions made on political whims undermine regulatory clarity and deter important investments that will only drive up costs in the long run.
Bottom Line: Underinvestment in critical infrastructure like natural gas pipelines is a short-term fix that will leave Pennsylvanians worse off in the long run. Shapiro should avoid other states’ mistakes and ensure that customers continue to have access to reliable and affordable energy.
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