Rendell's Energy Plan

From Capitolwire.com:

By Christopher Lilienthal
Staff Reporter
Capitolwire

HARRISBURG (Feb. 1) – Gov. Ed Rendell outlined an energy independence strategy Thursday that calls for the creation of an $850 million fund to promote conservation, cut out-of-state fuel imports and boost renewable energy production in Pennsylvania.

The fund would be financed by a fee the governor described as small on consumer electric bills.

More than half of Rendell’s proposed “Energy Independence Fund” – $500 million – would go toward Pennsylvania renewable energy projects, including solar manufacturing, advanced coal technologies and biofuels. Another $106 million would finance grants and loans for energy company expansion projects.

Rendell said he wants this energy strategy to lay the groundwork for replacing every gallon of fuel the state now imports from the Persian Gulf with energy generated in Pennsylvania.

“Every dollar we spend on energy we produce here is a dollar we don’t have to spend to export [energy from] somewhere else,” Rendell said.

In addition to funding renewable energy projects and energy expansion projects, the new fund would provide $244 million for customer incentives to be more energy efficient.

To establish the fund, Rendell said the state would assess electric customers a “systems benefit charge” equal to 0.05 cents per kilowatt-hour used. That means residential customers would pay an average fee of $5 a year; commercial users, $36 a year; and industrial consumers, $888 a year.

Rendell said these fees would generate returns for customers in expected average energy savings of $73 a year for residential customers, $425 a year for commercial users and $10,500 for industrial consumers.

Matthew Brouillette, president and CEO of the conservative Harrisburg-based Commonwealth Foundation, was not convinced that a new fee on energy consumers would yield the savings Rendell was forecasting.

“We have to remember that businesses don’t pay taxes; only people do,” Brouillette said. “That would be all the consumers, whether you own a home or purchase products or services. You will be paying for this $850 million fund.”

He said state government should allow the private market to decide how the renewable energy industry will expand.

“This is just going to be another tax on the people of Pennsylvania,” Brouillette said. “It will be passed through the businesses to regular Pennsylvanians.”