“This plan will cut Pennsylvanians’ energy bills by $10 billion over the next 10 years,” said Governor Rendell. “It will give us the ability to produce enough homegrown fuel to replace every gallon Pennsylvania currently imports from the Persian Gulf.
The first priority for this new energy initiative is to cut energy costs for Pennsylvania consumers. Electric generation rates can swing wildly during the course of the day and at different times of year. A recent study by PJM, the independent electricity grid operator that covers Pennsylvania, showed that cutting power consumption by just 3-5 percent during peak rate periods saves consumers across the state up to $230 million annually.
- The creation of a “Pennsylvania Sunshine” program will help residents pay for up to 50 percent of the cost of installing solar panels on their home or small business. At current electricity rates, the average household could save about $600 a year with a 5 kW system, or solar panels that generate about two-thirds of the electricity consumed in the home.
- Rebates would be provided for customers turning in old, inefficient air conditioners and refrigerators—two of the biggest energy-using appliances in the home—for new models that use at least 15 percent less energy.
Power generators and distributors also are required to invest in conservation first—initiatives that help customers cut energy consumption—rather than in costlier options like building new generation or buying power at peaking rates.
“Investing in conservation is critically important and the alternative is unacceptable,” said Governor Rendell. “Without this initiative, Pennsylvanians will need to build the equivalent of five large nuclear or coal-fired power plants at a cost of over $10 billion to meet our growing demand for electricity over the next 15 years.”
“Every year, Pennsylvanians send some $30 billion out of our state just to buy gas and liquid fuels,” the Governor said. “We need to keep those dollars at home and put our own people to work building our state’s energy independent future.
“I have made a priority of investing in farm land and open space preservation, and I am proud to say Pennsylvania now has the biggest program in the country. But even with this effort, we still lose three acres of farmland for every acre we save. If we give our farmers a chance to grow our energy, we can turn that around and help our farming families while we bolster our energy security.”
The commonwealth is already a leader in the production of renewable fuels, and was named again as the top state use of clean energy on the EPA's Top 25 list. One of the largest ethanol plants in the east will be built in the state, and approximately 340 million additional gallons of ethanol production are planned.
The Energy Independence Strategy will codify the “PennSecurity Fuels Initiative” by requiring that we grow and use one billion gallons of clean and renewable fuels. One billion gallons of biofuel represents about 12.5 percent of all fuel consumption in the state, and by 2017, would equal approximately the amount of fuel Pennsylvanians buy from the Persian Gulf. Instead of spending $30 billion to pay for foreign sources of fuel, more of these funds will be spent purchasing fuel from Pennsylvania’s companies and farmers.
Specifically, the Governor’s initiative would mean that every gallon of gasoline sold in Pennsylvania would include 10 percent ethanol, and every gallon of diesel would include an increasing amount (up to 20 percent) of soy or other renewable oil.
Fighting Global Warming
“I think everyone now understands that you cannot deal with energy policy without addressing global warming,” said Governor Rendell. “It is the largest environmental problem we face and Pennsylvania needs to do something about it.
“The efforts I am announcing today to save energy and produce more clean energy are a good first step, but they are only a first step. In the next 90 days I will present a comprehensive strategy to make Pennsylvania a leader in addressing climate change.”
The Energy Independence Fund
The Energy Independence Fund will be used to support the following clean energy activities:
· $244 million – Household appliance rebates and PA Sunshine Grants
· $106 million - Venture capital, grants and loans for expansion of energy companies
· $500 million - Clean energy projects and development or equipment costs for specific energy economic development projects
The Energy Independence Fund will be capitalized by a systems benefits charge on electric power consumers. Charges of this kind are already in place in 15 states and the District of Columbia. At the rate proposed, Pennsylvania’s charge would be lower than all but two of these jurisdictions.
The systems benefits charge is proposed at $0.0005 per kWh of electricity used (five-hundredths-of-a-cent or .5 mills). This charge would cost the average residential customer 45 cents per month. However, the Energy Independence Strategy as a whole is expected to save consumers nearly 15 times more than the cost of this fee. The average residential customer is expected to save $73 per year.
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