State Capitol Update
Governor Shapiro is set to hold his fourth annual budget address on February 4. This comes less than three months after the $50.1 billion 2025-2026 budget was signed by the Governor after a long impasse in the split General Assembly. A part of that deal included an official withdrawal from the Regional Greenhouse Gas Initiative (RGGI), which was a key outcome for Republicans.
Major issues like skill games and legalizing marijuana were not settled as part of the previous budget. Both are anticipated to again be key issues included in Governor Shapiro’s plan for new revenue streams.
The Pennsylvania Independent Fiscal Office warns that if state spending continues to outpace revenue, the Commonwealth’s Rainy Day Fund could be reduced by more than half as Pennsylvania faces a projected structural deficit exceeding $5 billion in fiscal year 2026–27. Absent new revenue measures, the general fund balance is expected to be depleted, and reserves could fall from $7.7 billion to approximately $3.1 billion by 2026–27.
Another key component of the 2026-2027 budget address will be his remarks on energy policy. Last year, the Governor introduced a six-prong package referred to as the Lightning Plan. Half of the legislation was voted out of the Democrat controlled House in 2026, with no action taken from the Republican controlled Senate, including House Bill 50,5 which is opposed by the PPA. None of the Lightning Plan legislation was negotiated as a part of the budget deal, with RGGI being the marquee energy-related win for Republicans.
The PPA will provide a detailed overview of the Governor’s 2026 – 2027 budget address as a part of the February 9 Express Update.
Data Center / LIHEAP House Bill Amended with Electrification Provisions
PPA is reviewing House Bill 1834 (Rep. Matzie, D–Beaver County), legislation that could significantly affect the future of Pennsylvania’s deliverable fuels industries. The bill was originally introduced to address the growing electric demand from artificial intelligence data centers and to protect residential and unrelated commercial ratepayers from potential rate increases.
As drafted, the bill would assess data centers to support funding for the Low-Income Home Energy Assistance Program (LIHEAP) and provide assistance for low-income household cooling costs. PPA supports state funding for home heating assistance.
A recently announced amendment by House Energy Committee Chair Rep. Feidler (D–Philadelphia) would expand the bill by directing additional funds to the Pennsylvania Energy Development Authority (PEDA) to finance electric heat pump installations for residential, small business, and charitable organization ratepayers, including homes currently using heating oil, propane, and natural gas.
The bill is scheduled for a vote in the House Energy Committee today. PPA will evaluate options following the committee’s action.
