Continued Electrification Initiatives By Federal & State Government

The following is a compilation of policies initiated by the federal and segments of Pennsylvania state government aimed at putting motor fuel and heating fuel marketers out of business.

1. EPA proposes elimination of Oil & Gas from Energy Star® Program
The U.S. Environmental Protection Agency (EPA) has officially announced a plan to begin eliminating non-heat pump HVAC appliances from the Energy Star® program. Non-heat pump HVAC appliances would include oil and gas furnaces/boilers. Removing these products from being eligible for federal energy tax credits will have a significant impact on consumer perception and purchasing decisions. Thank you to National Energy & Fuels Institute (NEFI) and R.W. Beckett for flagging this development proposal. The PPA will collaborate with other stakeholders to adamantly oppose this proposal.

2. House Bill 1240: Restructuring of electric utility ability to fund EV infrastructure expansion
House Bill 1240 was introduced last week by Rep. Joe Webster (D-Montgomery). The proposal would require electric utilities to submit plans to the PUC outlining the buildout of Electric Vehicle charging stations, providing the authority for the utility to recover the cost of this buildout from all electric ratepayers, and permit utilities to enter the retail charging business.

This bill is obviously a concern to PPA motor fuel members, but heating fuel companies also need to engage in opposition. This legislation would set a dangerous precedent established by allowing utilities to subsidize costs from ratepayers which could lead to similar policies resulting in funding the large scale buildout of electric heat pumps.

3. House Bill 952: Adopting zero-emission standards for residential & commercial buildings
House Bill 952 was introduced last month by Rep. Chris Rabb (D-Philadelphia). The proposal would create a statewide law that requires space (thermal heating) and water heaters to meet zero emission (electrification) standards starting in 2030. The legislation would require both new construction and the replacement of “worn-out equipment” to meet the zero-emission (electrification) installation standard.

4. Pennsylvania receiving millions through the IRA to assist in adopting zero energy building codes
The Inflation Reduction Act (IRA) of 2022 allocated 1 billion for grants to state- or local-level governments to update and achieve compliance with more stringent building energy codes. As previously reported in the Express, the Shapiro Administration recently released $1 million grants to planning agencies in Southwest PA, Southeast PA, and the Lehigh Valley. In addition, PA DEP received $3 million to assist local governments in developing their own greenhouse gas reduction plans. It is not clear how the funding will be utilized within these agencies but a portion of the efforts will most definitely be geared towards our industry.

5. Energy Choice legislation being held up in PA House
A proposal (Senate Bill 143) that would prohibit municipalities from adopting their own energy regulations and/or energy bans passed the Senate earlier this year but is currently being held up in the House Local Government Committee. Thus far, the House Democratic majority leadership has indicated its unwillingness to move Energy Choice legislation. A similar measure was vetoed by Governor Wolf last year. The fate of the Energy Choice legislation is currently in limbo as it is symbolically contradicts the energy agenda of the House Democrats.

6. Future implementation of federal home electrification rebate program
Pennsylvania will be receiving $258 million through the IRA money dedicated to home electrification efficiency rebates. The total rebate amount will be up to $14,000 depending on income level. The primary equipment promoted in this program is electric heat pumps but also includes other electric appliances, electric wiring, and weatherization services. Each state is tasked with administering the program based upon US Department of Energy (DOE) guidance. Pennsylvania DEP is currently creating the program which they plan to launch later this year.

7. Pending modifications to LIHEAP weatherization program
The Pennsylvania Weatherization Program (a segment of LIHEAP) is waiting for guidance from the federal Government regarding its new policy (for the first time) to encourage fuel switching to electric heat pumps in cases where LIHEAP customer home requires heating system replacement.

8. Pennsylvania issuing $171.5 million in EV infrastructure grants
Pennsylvania is actively implementing $171.5 million in dedicated NEVI formula funding over the next 5 years through the Inflation Reduction Act (IRA). PennDOT will be awarding NEVI grants to strategically deploy Direct Current Fast Charging (DCFC) stations along its designated Alternative Fuel Corridors (AFCs), to help build out the national EV AFC network. The current grant criteria requires grants to be awarded no more than 50 miles apart each AFC and no more than 1 mile from the nearest AFC exit. The first found of funding for federal fiscal years (FFY) 2022 and 2023 closed on May 5, 2023. Additional funding rounds will be release by PennDOT in 2024, 2025, and 2026.

Legislative activity will pick up during the month of June as the legislature reviews the budget, conducts public hearings through the House and Senate appropriations committees, and enacts budget bills for the governor’s approval prior to the June 30 end of the state fiscal year. The PPA will be notifying its members as to the right time to begin communicating with their legislators in opposing these bills and regulatory actions.

PPA monitors and fights for the interests of the liquid fuel industry every day. There is a tsunami of electrification proposals coming upon us. WE CANNOT WIN without financial support of our advocacy efforts. We are specifically asking members to make personal contributions to our POMPAC Fund (first preference) as well as corporate contributions to our Energy Defense Fund (second preference). Thank you to members who have made contributions on an annual basis. We would again ask you to consider a contribution in 2023. If you haven’t contributed in the past, then NOW is the time to do so.