By Ned Rauch Mannino
Faced with unprecedented energy costs this winter, Pennsylvania must recognize that the challenge extends beyond the next few months. The pieces to guard against runaway energy markets already exist, but leadership needs a coordinated strategy to put them together.
With energy costs 30% higher and on the rise since last year, every conversation to offset this trend is important, especially to support low-income and fixed-income households. As leadership focuses attention on this winter, today’s situation also demonstrates the importance of better long-term strategic planning for the seasons to come.
Pennsylvania is entering a perfect storm of offers and price spikes. Energy cost inflation continues to climb: Recent U.S. Bureau of Labor Statistics Consumer Price Index (CPI) finds fuel oil prices jump nearly 60%, gasoline by 50%, propane by 35% and natural gas by almost 30% higher, with a% increase in the cost of electricity compared to last year. According to the US Energy Information Administration, heating bills are also expected to be 50% higher than last year.
Perhaps impossible to prevent at the national level, these “storms” can be mitigated at the state level, provided they are supported by forward thinking, full planning for the potential of the Commonwealth as a true energy leader.
Looking at various energy sources over the past few years, the plans of previous states have paid one-off and selective attention. But that misses the mark, as Pennsylvania is unique in its ability to successfully foster multiple energy sectors simultaneously.
Consider: Each energy bill shares a connection point with the Commonwealth’s cumulative energy portfolio. On display during this current price spike, Pennsylvania’s needs cannot be adequately met on a piecemeal basis. The goal is to add options, not limits.
For consumers seeking some degree of relief, the best approach pursues an ‘all of the above’ mindset – a quest for traditional, renewable energy used together towards a single goal: energy resilience to life. statewide.
Pennsylvania’s diverse energy profile positions it as a leader among states. It is therefore important that government policy does not work against the grain. Rather than separating Pennsylvania’s energy advantage with mandates, bailouts, and preferential treatment, leadership should respond to this value proposition with an inclusive, results-driven strategy to deliberately fuel all types of energy development, which in turn promotes economic growth and employment.
Interest in such a comprehensive strategy exists within the capital, with particular appreciation for Representative Tom Mehaffie (Dauphin) ‘s attempt to trigger a statewide energy plan. Industry partners and nonprofits would certainly come to the table, if they ever are.
Call it an emergency session or an energy summit: in the midst of this current inflation crisis, this is an imperative conversation – a conversation avoiding one-sided decision-making but instead involving all voters, opening a transparent discussion for government, industry and consumers.
A global effort can simply support essential private sector action to prevail against similar and future worst economic and environmental scenarios. In making a commitment to jointly create free and fair market opportunities for the development of traditional and renewable energies, the takeaways from this strategic planning session could include:
- Vulnerability assessments and regional economic impact analysis to tailor solutions, site projects and attract capital investment.
- Clarity and modernization of regulations to make project development coherent, timely and efficient for the private sector and government.
- Commitment to a coherent and fair tax and tariff policy that supports the current and future expectations of the private sector.
- Alignment of workforce training programs with development goals to facilitate workforce preparation.
- A legislative path to allow portfolio expansion energy initiatives, such as the community solar bill from Senator Mario Scavello (R-Monroe).
- Consideration of a strategic energy infrastructure fund to carry out important and critical energy infrastructure projects and prepare the Commonwealth for historic events, such as the polar vortex or the Texas storms.
- A link between Pennsylvania’s vision for sustainable energy development and broader conservation goals.
- Integrated messages of the Commonwealth’s key elements for economic development, environmental protection and conservation.
There will always be the disparities in the geopolitical and economic conditions that created this year’s energy crisis and will reveal the spaces where advance planning could have taken place. A new year begins with this current crisis serving as a call to action.
There is a tremendous opportunity for a leadership response. Deliberate attention today could begin strategically positioning Pennsylvania’s energy advantage for tomorrow and find the Commonwealth better prepared for future storms.
Ned Rauch-Mannino has served as Assistant Under Secretary for Global Operations and Senior Advisor for Global Markets at the US Department of Commerce. A resident of Pennsylvania, he provides advice on natural resources, energy and economic development.