Governor Josh Shapiro has unveiled a bold new plan aimed at boosting Pennsylvania’s energy sector. He announced his proposal at Pittsburgh International Airport, targeting the construction of large power plants and offering substantial tax breaks for projects that contribute electricity to the grid and utilize hydrogen. This ambitious plan is anchored by a $1.5 billion partnership between KeyState Energy and CNX Resources to produce hydrogen-based fuels.
Governor Shapiro emphasized Pennsylvania’s history as an energy leader, lamenting the fact that the state is currently lagging behind competitors in job creation, investment, and innovation. He’s determined to change that narrative by incentivizing the construction of next-generation energy projects. The plan includes an updated EDGE manufacturing tax credit aimed at supporting projects that generate electricity, use hydrogen, and produce hydrogen-based aviation fuel.
The proposal offers a credit of up to $100 million for three years for power plants dedicated to adding reliable energy sources to the grid. Additionally, it provides up to $49 million annually for regional hydrogen projects, with specific criteria to qualify. Sustainable aviation fuel producers stand to gain up to $15 million per year if they make a $250 million capital investment and create 400 jobs.
Shapiro pointed out that Pennsylvania is one of just 12 states lacking an entity to fast-track siting decisions for critical energy projects. To address this, he intends to establish the Pennsylvania Reliable Energy Siting and Electric Transition (RESET) Board, which will streamline the permitting process for energy projects. The governor also plans to encourage communities to cut utility bills through shared energy resources and increase rebates for energy-efficient appliances.
His office stated that this plan builds on his administration’s continuous efforts to enhance energy security in the state. Back in March 2024, Shapiro introduced an emissions reduction strategy that featured a carbon “cap-and-invest program” compelling power plant owners to pay for their greenhouse gas emissions. This plan also required utilities to purchase more electricity from renewable sources.
These initiatives are predicted to save Pennsylvania energy consumers $664 million by 2040, while generating $11.4 billion in clean, reliable energy investments. Shapiro expressed his eagerness to collaborate with the General Assembly to pass this “commonsense plan,” aiming to lower consumer costs, create more jobs, and solidify Pennsylvania’s status as a national energy leader.
However, Shapiro’s plan must gain approval from lawmakers and is anticipated to encounter obstacles in a divided legislature. Republicans have expressed skepticism, arguing that the governor’s energy policy may hinder Pennsylvania’s ability to attract businesses interested in constructing new natural gas-fired power plants. They also question the plan’s effectiveness in stabilizing the power grid.
State Senator Gene Yaw has been vocal in his criticism, describing the governor’s energy initiatives as “nothing but a band-aid for a broken bone.” He claims that until Shapiro abandons the Regional Greenhouse Gas Initiative (RGGI), any claims about easing Pennsylvania’s power deficit should be taken with a grain of salt.
The timing of Shapiro’s announcement is notable, coming just before he is set to present his third budget proposal amid a statewide energy crunch. This situation threatens to increase electricity bills across Pennsylvania. The Associated Press contributed additional reporting on this evolving story.
Governor Shapiro’s vision for Pennsylvania’s energy future is ambitious, aiming to position the state at the forefront of energy innovation. His focus on hydrogen-based energy and sustainable aviation fuels reflects a commitment to cleaner, more reliable energy sources. Yet, the political landscape remains challenging, with opposition voicing concerns over the feasibility and potential impacts of his plan.
As the debate unfolds, Shapiro remains confident in his approach, emphasizing the long-term benefits of his energy strategy. His commitment to cutting costs for consumers and creating new jobs is central to his administration’s agenda. The proposed RESET Board signifies a strategic move to expedite energy project approvals, streamlining processes that have previously been slow and cumbersome.
Governor Shapiro’s plan is a testament to his belief in Pennsylvania’s potential to lead in the energy sector. Despite the political challenges, he continues to prioritize the state’s economic and environmental future. The coming months will be critical as lawmakers and stakeholders assess the viability of this comprehensive energy proposal.

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