New PA Environmental Legislation Addresses Climate Change and Alternative Fuels

This advisory addresses Pennsylvania environmental legislation recently signed by Governor Edward G. Rendell. The following summarizes key provisions of the new laws.

Pennsylvania Climate Change Act

Senate Bill 266, the Pennsylvania Climate Change Act, was enacted as Act 70 of 2008 on July 9, 2008. The act requires the Department of Environmental Protection (DEP) to submit a report to the General Assembly on the potential climate change impact in the commonwealth by April 2009. Further, the DEP is required to annually compile an inventory of greenhouse gases emitted in the commonwealth by all sources. The act requires the DEP to establish a voluntary greenhouse gas registry through which interested entities can record reductions in greenhouse gas emissions. The law also establishes a Climate Change Advisory Committee for the purpose of advising the DEP on the implementation of the provisions of the act. The DEP, in consultation with the Climate Change Advisory Committee must file a climate change action plan by October 2009, identifying: greenhouse gas emission and sequestration trends; strategies from reducing greenhouse gas emissions; and recommendations for legislative changes to address climate change. This law took effect on July 9, 2008.

Alternative Fuels Incentive Act

Special Session Senate Bill 22, the Alternative Fuels Incentive Act, was adopted July 10, 2008. The law provides funding for grants to school districts, municipalities, nonprofits, private businesses and individuals to encourage biofuel development. The legislation creates a rebate program for commonwealth residents who purchase plug-in hybrid or other alternative fuel vehicles, and establishes funding for a nitrogen tire inflation program. The law establishes biomass-based diesel incentives program that provides in-state biodiesel producers $5.3 million annually in state funding through June 30, 2011. Eligible producers will qualify for a 75-cent-per-gallon subsidy that will be capped at $1.9 million per producer. The portion of the act related to biomass-based diesel incentives took effect on July 10, 2008; the remainder of the law becomes effective September 8, 2008.

Biofuel Development and In State Production Incentive Act

House Bill 1202, the Biofuel Development and In State Production Incentive Act, was enacted as Act 78 of 2008 on July 10, 2008. The law establishes biofuel percentage requirements that will go into effect once in-state production reaches certain levels. The act provides for coal-to-liquids and renewable diesel substitution provided certain requirements are met. Once in-state cellulosic production reaches 350 million gallons, all gasoline sold in the commonwealth must contain at least 10 percent ethanol. The act mandates a DEP study on the impact of this law on air quality. This law becomes effective October 8, 2008.

Alternative Energy Investment Act

House Bill 1, the Alternative Energy Investment Act was adopted on July 9, 2008. The act establishes an alternative energy development program to fund a variety of renewable energy programs. The act provides the Commonwealth Financing Authority with $665.9 million for investments in alternative and renewable energy, including:

$165 million for grants/loans for clean energy projects and alternative energy projects.
$100 million for consumer and small business solar energy projects
$92.5 million for consumer energy conservation projects
$80 million for grants/loans related to projects related to solar energy.
$50 million for Alternative Energy Production Tax Credits.
$40 million to Ben Franklin Technology Development Authority to develop energy efficiency technologies.
$25 million for loans/grants for geothermal projects; wind energy projects.
$25 million for loans/grants for high-performance buildings.
$25 million for grants for pollution control devices at coal-fired plants with capacity of less than 500 megawatts.
$10 million annually for emergency energy assistance fund through 2012.