Testimony of Nathan Benefield, Chief Policy Officer Commonwealth Foundation Senate Majority Policy Committee Hearing on Energy in Pennsylvania

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Chairman Argall and members of the committee:

Thank you for the opportunity to submit these remarks on increasing energy production in Pennsylvania. The Commonwealth Foundation promotes market-driven solutions that will benefit all Pennsylvanians.

Overview

The committee has asked how Pennsylvania can increase energy production and, in doing so, drop the cost of electricity. A typical Pennsylvania household’s monthly electric bill has risen from $191 in 2022 to $257 in 2026, a 35 percent increase and more than twice the rate of regional inflation.[1] It is the right question, and Pennsylvania is in the unusual position of not having to guess at the answer.

Pennsylvania is the nation’s largest net exporter of electricity and its second-largest energy producer.[2] Natural resource abundance is not the problem. Neither is investor interest.

Over the past seven years, the commonwealth ran the experiment in both directions.[3] With the Regional Greenhouse Gas Initiative (RGGI), Pennsylvania spent six years threatening a carbon tax, and investment left. The November 2025 budget settled the question, and investment came back.

Where Pennsylvania Stands

Pennsylvania generated 246.7 terawatt-hours of electricity in 2025, more than any other state in the PJM Interconnection region, and exported 89 million megawatt-hours, nearly double the next-highest state.[4]

The generation mix has changed substantially. Between 2018 and 2025, natural gas rose from 35.5 percent of Pennsylvania’s generation to 58.3 percent. Nuclear fell from 38.8 to 30.4 percent. Coal fell from 17.1 percent to 4.3 percent. Waste coal, wind, hydro, biomass, and solar together account for the remaining 7 percent. Natural gas and nuclear now produce 88.7 percent of Pennsylvania’s electricity.[5]

The mandated resources lost ground. Wind, hydro, and biomass all generated less electricity in 2025 than in 2018. Solar grew from essentially nothing to 1.9 terawatt-hours, still under one percent of the total. Taken together, renewables fell from 4.8 percent of Pennsylvania’s electricity to 3.8 percent over the period.[6] After two decades, Pennsylvania’s Alternative Energy Portfolio Standards Act (AEPS) has failed.[7]

Pennsylvania generated 14 percent more electricity in 2025 than in 2018, even though the state’s generating capacity shrank over the same period. The commonwealth currently produces more from less because the remaining plants are running harder. Fleet-wide utilization rose from 46 percent in 2018 to 53 percent in 2024, almost entirely by natural gas: gas plants ran 38 percent of the time in 2018 and 57 percent in 2024, as coal was priced out of the merit order and then off it.[8]

The efficiency gain of running existing natural gas plants more is nearly spent, with remaining coal generation now just four percent of Pennsylvania’s total. Running the existing fleet harder cannot meet the next increment of demand.

How the grid works. Pennsylvania does not operate its own electricity market. It belongs to PJM Interconnection, the regional transmission organization that coordinates the grid across all or part of 13 states and the District of Columbia, from Illinois to New Jersey. PJM dispatches generation, plans transmission, and operates a capacity market: an auction held several years in advance in which generators are paid to be available when the grid is most stressed, whether or not they end up running. Those capacity costs are passed through to Pennsylvania consumers as part of the generation charge on their bills. The Pennsylvania Public Utility Commission has limited authority over capacity, generation, and transmission pricing, which is regulated by the Federal Energy Regulatory Commission (FERC).

Those auctions are not a market in the ordinary sense; they are an administrative procurement with parameters set by PJM and the FERC. When prices rose sharply in 2024, Gov. Josh Shapiro filed a complaint with FERC that an April 2025 settlement imposing a price ceiling resolved.[9] The last three auctions have all cleared at that ceiling. The most recent cleared 6,831 megawatts below PJM’s own reliability requirement and drew 525 megawatts of new generation. PJM’s own results report warns that “a price cap below the established VRR [Variable Resource Requirement] Curve can reduce the amount of investment, and therefore supply, in the PJM region.”[10] A ceiling holds the price down without producing the capacity that would bring it down.

Two defining consequences follow. Pennsylvania’s generators serve customers far beyond the commonwealth’s borders, so what gets built here affects reliability across the region. And decisions made at PJM, FERC, and in other states shape the return on any plant built in Pennsylvania regardless of what Harrisburg does.

Pennsylvania Retiring Capacity Faster than Replacing It

Since 2015, Pennsylvania has retired almost 6,600 megawatts of generating capacity, almost all of it coal.[11] During the RGGI years, 2019 to 2024, retirements outpaced new generation and the state’s operable capacity declined.[12] In the six years before that, it had grown by 3,622 megawatts as new natural gas plants more than offset coal retirements.

What happened to those sites is the more hopeful half of the story, and it is not widely known. Of the roughly 6,600 megawatts Pennsylvania retired since 2015, about seven in ten sat at just two locations: Bruce Mansfield in Beaver County and Homer City in Indiana County. Both are under redevelopment as natural gas plants, at a scale at least matching their retired capacity. Retired coal sites are preferred for new dispatchable generation, or the on-demand production that peaks up or turns down to keep the lights on, because of existing local approvals, interconnection rights, switchyards, cooling infrastructure, and water access. The counties that hosted the last generation of dispatchable power are the ones best positioned to host the next.

Meanwhile, demand grows, which is good news for a state that sells power to its neighbors. But we arrived at this moment short. More than 4,000 megawatts scheduled to leave the grid, or that have already left it, are staying longer or returning: Keystone and Conemaugh under an April 2026 consent decree that moved their closure from 2028 to 2032, and Eddystone Units 3 and 4 running on rolling 90-day emergency orders from the U.S. Department of Energy.[13]

Lessons from RGGI

Between 2019 and 2024, new generation proposals in Pennsylvania fell 38 percent while Ohio’s grew 33 percent, a 71-point swing between two states that share the same shale, wholesale market, and federal rules.[14]

Pennsylvania’s completions from 2019 to 2021 (4,881 megawatts) were almost entirely projects proposed before RGGI. Once that backlog cleared, completions collapsed: just 648 megawatts across 2022 to 2024. Specifically for natural gas, Ohio brought 3,265 megawatts into operation during Pennsylvania’s RGGI window. The Keystone State brought next to nothing and proposed no new utility-scale gas generation at all between 2019 and 2023.[15]

Even though legal injunctions blocked the RGGI carbon tax, the credible threat alone was sufficient to send power plant builders out of Pennsylvania. Conservatively, Pennsylvania forfeited 3,800 to 4,800 megawatts of generating capacity to those six years of uncertainty. At $1,000 per kilowatt, that amounts to about $4 to $5 billion in market-tested investment that went elsewhere or never happened.[16]

Then this legislature settled the question, and the market answered immediately. The Senate passed repeal legislation in February 2025, and Act 45 ended Pennsylvania’s participation that November.[17] In a single year, 5,947 megawatts of new generation entered the proposal pipeline against an average of 451 megawatts per year over the preceding five.[18] New demand combined with the RGGI exit means investors can build new reliable power plants.

What Other States Did

Pennsylvania’s experience was not unique in the region, and the regional pattern is worth this committee’s attention.

Between 2018 and 2024, every PJM state that participated in RGGI lost operable generating capacity while non-RGGI states gained.[19]

Maryland is the severe case, losing 21 percent of its generating capacity in six years. It is now paying roughly $180 million a year in reliability-must-run contracts to keep 1970s-era units at Brandon Shores and Wagner operating past their announced retirement.[20] PJM imposes those contracts when a plant’s closure would create a reliability violation, and nothing has been built to take its place.

Virginia is instructive for a different reason. It joined RGGI, withdrew by regulation, had that withdrawal struck down in court, and is now going back in. Participation resumed on July 1, 2026, and Virginia returns to the auctions this September.[21] Its capacity declined. Power plants that take seven years to build and have thirty-year lifespans need to be sure the government will not shut their business down.

That is the lesson worth taking, and it is not simply that carbon programs reduce capacity. Pennsylvania shows that a program which never took effect still drove investment away. Virginia shows that a withdrawal which never became settled failed to bring it back. What matters to a builder is not the current state of the rule, but whether the rule can be counted on to last.

The Pipeline Is Full: Three Things Decide How Much Gets Built

Pennsylvania now has 39,497 megawatts awaiting interconnection in PJM’s queue, excluding storage.[22] Eighty-one percent of it is natural gas and nuclear. Alongside it, more than 13 gigawatts and roughly $31.8 billion in announced investment in new power plants.[23] Three things determine how much of it becomes electricity:

First, policy. Act 45 last year abrogated the CO2 Budget Trading Program.[24] What a budget settles, a budget can unsettle. A company financing a thirty-year asset is pricing the risk that this returns next session.

Second, siting. The clearest signal developers are sending is where they are building: two of the three largest retired coal sites in Pennsylvania are being redeveloped as gas plants. The interconnection rights, switchyards, cooling equipment, civil works and local approvals are already there. Those projects are moving because the hardest barriers are behind them.

Third, supply chain. Gas turbines have become a binding physical constraint industry-wide. GE Vernova’s gas turbine backlog and slot reservations grew from 83 gigawatts at the end of 2025 to 100 gigawatts by March and 116 gigawatts by June.[25] Pennsylvania cannot legislate turbines into existence. But the projects this commonwealth turned away between 2019 and 2024 would have placed those orders before the global rush.

What Pennsylvanians Say

Two successive Commonwealth Foundation surveys highlight the issue.

In September 2025, 67 percent of Pennsylvanians said energy affordability should be a higher priority for elected officials than combating climate change.[26] By June 2026, that figure had risen to 78 percent, against 22 percent who put climate first.[27]

The experience behind that shift is nearly universal. In 2025, 78 percent reported higher energy bills over the previous two years. In 2026, 79 percent reported higher bills over the previous year. Utility costs now rank second among household budget concerns, right behind groceries, and ahead of housing.

This also bears out in Pennsylvanians’ opinions on what direction energy policy should go. They oppose costly taxes and mandates. Moreover, they support building reliable and affordable natural gas infrastructure.

Recommendations

Five things would help, none of which require new spending:

Make permit and study deadlines enforceable, with a defined consequence when they are missed.[28]

Require legislative approval for regulations carrying an economic impact of more than $1 million.[29]

Do not reopen the carbon tax question. Shapiro’s Pennsylvania Climate Emissions Reduction Act (PACER) is the same policy under a different name.[30] Pennsylvania already lost six years of investment to a program that never took effect; a carbon price actually imposed would not produce a smaller version of that result.

Do not expand and consider phasing down existing purchase mandates. PRESS would raise the alternative energy requirement from 18 percent of retail sales to 50 percent.[31] Ratepayers already paid $702 million in both 2024 and 2025 under the current standard.[32]

Ensure and expand legal pathways for large loads to build their own generation or independent power networks to protect residents and businesses from costs associated with new electricity demand.[33]

Conclusion

The generation Pennsylvania is missing was not blocked by geology, by a shortage of capital, or by any lack of willing builders. It went where the rules were easier to predict.

This legislature has already proved it can fix that. When you settled one question, nearly 6,000 megawatts answered it within a year. The task now is to make that certainty durable, to make the deadlines already on the books mean something, and to let the price of power, not the outcome of the next budget negotiation, decide what gets built in Pennsylvania.

Additional Resources


[1] Pennsylvania Independent Fiscal Office, “Pennsylvania Electricity Update,” Research Brief, July 2026, https://www.ifo.state.pa.us/releases/952/Pennsylvania-Electricity-Update/.

[2] Pennsylvania Independent Fiscal Office, “Pennsylvania Electricity Update,” February 4, 2026 (updated March 11, 2026), https://www.ifo.state.pa.us/releases/907/Pennsylvania-Electricity-Update/; U.S. Energy Information Administration, “Pennsylvania Electricity Profile 2024,” November 10, 2025, https://www.eia.gov/electricity/state/pennsylvania/.

[3] Joshua Schubert, “Pennsylvania’s RGGI Odyssey: Six Years of Lost Investment Underline Danger of New State Energy Taxes,” Commonwealth Foundation, May 4, 2026, https://commonwealthfoundation.org/research/pennsylvanias-rggi-odyssey/.

[4] U.S. Energy Information Administration, Electricity – Form EIA-923 Detailed Data with Previous Form Data, “2025: EIA 923,” accessed August 3, 2026, https://www.eia.gov/electricity/data/eia923/; Pennsylvania Independent Fiscal Office, “Pennsylvania Electricity Update,” Research Brief, February 2026, Table 3. See note 2.

[5] U.S. Energy Information Administration, Electricity – 2018: EIA-923 and 2025: EIA-923. See note 4.

[6] U.S. Energy Information Administration, Electricity – 2018: EIA-923 and 2025: EIA-923. See note 4. Figure covers wind, hydro, biomass, and solar.

[7] Joshua Schubert, “The Rising Cost of Pennsylvania’s Alternative Energy Portfolio Standards,” Commonwealth Foundation, June 16, 2026, https://commonwealthfoundation.org/research/the-rising-cost-of-pennsylvanias-alternative-energy-portfolio-standards/.

[8] Author’s calculation from U.S. Energy Information Administration, Form EIA-923 (net generation) and Form EIA-860 (nameplate capacity), 2018 and 2024. Utilization is annual net generation divided by nameplate capacity times hours in the year.

[9] Federal Energy Regulatory Commission, “Order Accepting Tariff Revisions and Dismissing Complaint re Commonwealth of Pennsylvania v. PJM Interconnection, L.L.C. under ER25-1357 et al. (Docket ER25–1357),” April 21, 2025, https://elibrary.ferc.gov/eLibrary/filelist?accession_num=20250421-3069.  

[10] PJM Interconnection, “2028/2029 Base Residual Auction Report” (July 14, 2026), 3, 5, https://www.pjm.com/-/media/DotCom/markets-ops/rpm/rpm-auction-info/2028-2029/2028-2029-bra-results-report.pdf. See also PJM Inside Lines, “PJM Capacity Auction Procures 138,318 MW of Generation Resources as Work Continues to Address Growing Electricity Demand,” July 14, 2026, https://insidelines.pjm.com/pjm-capacity-auction-procures-138318-mw-of-generation-resources-as-work-continues-to-address-growing-electricity-demand/. For further analysis, see Joshua Schubert, “Why PJM’s Price Cap Costs Pennsylvanians,” Commonwealth Foundation, April 17, 2026, https://commonwealthfoundation.org/blog/why-pjms-price-cap-costs-pennsylvanians/.

[11] U.S. Energy Information Administration, Form EIA-860M, “Monthly Update to the Annual Electric Generator Report,” retired generator inventory, June 2026 vintage, https://www.eia.gov/electricity/data/eia860m/.

[12] Schubert, “Pennsylvania’s RGGI Odyssey: Six Years of Lost Investment.”

[13] Commonwealth of Pennsylvania, Department of Environmental Protection v. Keystone-Conemaugh Projects, LLC, No. 2169-CD-2025-1 (Pa. Commw. Ct. Apr. 20, 2026) (unopposed motion to enter consent decree), https://www.pa.gov/content/dam/copapwp-pagov/en/governor/documents/motion%20to%20enter%20cd-as%20filed.pdf; U.S. Department of Energy, Order No. 202-26-24, PJM Interconnection, L.L.C. and Constellation Energy Corp. (May 21, 2026), https://www.energy.gov/documents/doe-emergency-order-202-26-24. Order No. 202-26-24 is the fifth consecutive ninety-day order, following Order Nos. 202-25-04, 202-25-08, 202-25-10, and 202-26-17.

[14] Schubert, “Pennsylvania’s RGGI Odyssey: Six Years of Lost Investment.”

[15] Joshua Schubert, “How Carbon Taxes Collapsed Pennsylvania’s Generation Investment and What It Means for the Data Center Boom,” National Taxpayers Union, June 29, 2026, https://www.ntu.org/publications/detail/how-carbon-taxes-collapsed-pennsylvanias-generation-investment-and-what-it-means-for-the-data-center-boom. Figures count only new proposals entering each state’s pipeline, a stricter measure than cumulative pipeline volume.

[16] Schubert, “Pennsylvania’s RGGI Odyssey: Six Years of Lost Investment.” Capacity estimates reflect documented losses discounted by the pre-RGGI conversion rate and component-based analysis; estimates using trajectory-based and pipeline-lifecycle methods range as high as 8,400 megawatts. Investment figure calculated at $1,000 per kilowatt, below reported construction costs for comparable combined-cycle projects in the period.

[17] Rep. Tarik Khan, 2025 Act 45, P.L. 156 § 47 (House Bill 416), Pennsylvania General Assembly, Regular Session 2025–26, November 12, 2025, https://www.palegis.us/statutes/unconsolidated/law-information/view-statute?txtType=PDF&SessYr=2025&ActNum=0045&SessInd=0. See also 52 Pa.B. 2471.

[18] Author’s calculation from U.S. Energy Information Administration, Form EIA-860, proposed generators, annual vintages 2008–2025, deduplicated so each unit is counted once in the year it first appears as proposed.

[19] U.S. Energy Information Administration, Electricity: Form EIA-860 Detailed Data (2008–2024), September 9, 2025, https://www.eia.gov/electricity/data/eia860/.

[20] H.A. Wagner LLC, Brandon Shores LLC, 191 FERC 61,098 (2025), Docket Nos. ER24-1787-000, ER24-1787-001, ER24-1790-000, ER24-1790-001 (order on contested settlement, May 1, 2025). The settlement provides fixed payments of $312 per megawatt-day for Brandon Shores Units 1 and 2 (approximately $145 million annually) and $137 per megawatt-day for H.A. Wagner Units 3 and 4 (approximately $35 million annually), plus performance incentives of $5 million and $2.5 million, respectively. See also Talen Energy, “FERC Approves Reliability Must Run Settlement Agreement for Units at Talen Energy’s Brandon Shores and H.A. Wagner Power Plants,” May 1, 2025, https://ir.talenenergy.com/news-releases/news-release-details/ferc-approves-reliability-must-run-settlement-agreement-units.

[21] Association of Energy Conservation Professionals v. Virginia State Air Pollution Control Board, No. CL23000173-00 (Va. Cir. Ct., Floyd Cnty., Nov. 18, 2024); appeal withdrawn, No. 0234-25-3 (Va. Ct. App. Mar. 5, 2026); Va. House Bill 397 and Senate Bill 802, Virginia General Assembly, 2026 Regular Session; Commonwealth of Virginia, 2026 caboose budget. Participation resumed July 1, 2026.

[22] PJM Interconnection, Cycle 1 service request data, https://www2.pjm.com/planning/m/cycle-service-request-status, exported August 3, 2026, filtered to Pennsylvania projects and excluding storage. PJM updates the database continuously. For PJM-wide Cycle 1 totals, see PJM Inside Lines, “Over 700 New Generation Projects Accepted Into First Cycle of Reformed Interconnection Process,” August 3, 2026, https://insidelines.pjm.com/over-700-new-generation-projects-accepted-into-first-cycle-of-reformed-interconnection-process/.

[23] Constellation Energy, “Constellation to Launch Crane Clean Energy Center, Restoring Jobs and Carbon-Free Power to the Grid,” September 20, 2024, https://www.constellationenergy.com/news/2024/Constellation-to-Launch-Crane-Clean-Energy-Center-Restoring-Jobs-and-Carbon-Free-Power-to-The-Grid.html; Homer City Redevelopment, “Former Homer City, PA Coal Plant Officially Reopens as State-of-the-Art Natural Gas Facility,” April 2, 2025 https://www.homercityredevelopment.com/post/former-homer-city-pa-coal-plant-officially-reopens-as-state-of-the-art-natural-gas-facility; The Frontier Group of Companies, “The Frontier Group of Companies to Transform Bruce Mansfield Power Plant into State-of-the-Art Natural Gas Power Plant, Supporting America’s Energy Goals and Pennsylvania’s Economic Growth,” Business Wire, July 15, 2025, https://www.businesswire.com/news/home/20250715103342/en/; U.S. Department of Commerce, “Fact Sheet: New Energy Projects, U.S.-Japan Trade Deal,” March 2026, https://www.commerce.gov/news/fact-sheets/2026/03/fact-sheet-new-energy-projects-us-japan-trade-deal.

[24] Schubert, “How Carbon Taxes Collapsed Pennsylvania’s Generation.” See also: Independent Regulatory Review Commission, “Regulation #7-559: CO2 Budget Trading Program,” accessed August 11, 2026, https://www.irrc.state.pa.us/regulations/RegSrchRslts.cfm?ID=3285.

[25] GE Vernova, “GE Vernova Releases First Quarter 2026 Financial Results,” April 22, 2026, https://www.gevernova.com/news/articles/ge-vernova-releases-first-quarter-2026-financial-results (gas turbine backlog and slot reservation agreements grew from 83 GW to 100 GW during the quarter); GE Vernova second quarter 2026 financial results, July 2026 (116 GW, comprising 53 GW of equipment backlog and 63 GW of slot reservation agreements).

[26] Commonwealth Foundation, “New Poll: Inflation, Economy, Taxes, and Crime Top Voter Concerns; Pennsylvanians Hold Shapiro Responsible for Budget Impasse,” release, September 3, 2025, https://commonwealthfoundation.org/2025/09/03/new-poll-inflation-economy-taxes-and-crime-top-voter-concerns-pennsylvanians-hold-shapiro-responsible-for-budget-impasse/.

[27] Commonwealth Foundation, “New Poll: Pennsylvanians Reject Shapiro’s Budget,” release, June 24, 2026, https://commonwealthfoundation.org/2026/06/24/new-poll-pennsylvanians-reject-shapiros-budget-2026/. Survey of 833 registered Pennsylvania voters, June 18–21, 2026.

[28] Elizabeth Stelle, “Pennsylvania Permitting Feels the Need for SPEED,” Commonwealth Foundation, March 9, 2026, https://commonwealthfoundation.org/blog/pennsylvania-permitting-feels-the-need-for-speed/. Pennsylvania’s SPEED program reaches roughly 13 percent of Department of Environmental Protection permits, licenses, and certifications; its “deemed approved” provision automatically approves complete air quality permits at 30 days. For a state precedent pairing a deadline with an automatic consequence, see Pennsylvania Public Utility Commission, Interconnection and Tariffs for Large Load Customers, Docket No. M-2025-3054271, Final Order (April 30, 2026), https://www.puc.pa.gov/pcdocs/1929842.pdf, adopting a six-month maximum for electric distribution companies to complete large load interconnection studies, with a 50 percent application fee refund for each 90-day period beyond the deadline; those refund costs fall on the utility and may not be allocated to other customers.

[29] Sen. Dawn Keefer, Senate Bill 333, Pennsylvania General Assembly, Regular Session 2025–26, https://www.palegis.us/legislation/bills/2025/sb0333. Passed by the Senate June 11, 2025, this bill applies to regulations with an annual economic impact of $1 million or more, requiring Independent Fiscal Office cost verification followed by a General Assembly vote within 30 calendar days or 10 legislative days, whichever is longer.

[30] Rep. Aerion Abney et al., House Bill 503, Pennsylvania General Assembly, Regular Session 2025–26, https://www.legis.state.pa.us/cfdocs/billInfo/billInfo.cfm?sYear=2025&sInd=0&body=H&type=B&bn=0503.

[31] Rep. Danielle Friel Otten, House Bill 501, Pennsylvania General Assembly, Regular Session 2025–26, https://www.palegis.us/legislation/bills/2025/hb501; 52 Pa. Code § 75.61; Isaac Orr and Mitch Rolling, “Preventing Pennsylvania from Powering Down: Analysis of Governor Shapiro’s PACER and PRESS Proposals,” Commonwealth Foundation, May 27, 2025, https://commonwealthfoundation.org/research/pacer-press-report.

[32] Pennsylvania Public Utility Commission, Alternative Energy Portfolio Standards Annual Report, 2024 and 2025 editions, https://www.puc.pa.gov/filing-resources/reports/alternative-energy-portfolio-standards-aeps-reports/.

[33] Joshua Schubert and Travis Fisher, “Pennsylvania Wants Data Centers to Pay Their Own Way. There’s a Better Way to Do It,” RealClearEnergy, August 3, 2026, https://www.realclearenergy.org/articles/2026/08/03/pennsylvania_wants_data_centers_to_pay_their_own_way_theres_a_better_way_to_do_it_1197766.html. The Commission’s large load proceeding addressed large customers bringing primary or back-up generation to serve their load, and the option for interconnecting Large Load Customers to make infrastructure upgrades directly at their own expense. See note 28.