by David Riester
Nearly every state faces a near-term power supply/demand imbalance. Everyone in power, energy, AI, or data centers sees it daily; every electricity user sees it in rising bills. Most states lack quick solutions because building power plants and grid infrastructure takes time.
Pennsylvania, however, has an ace up its sleeve: ~2GW of “NEM” power plants (natural gas, anaerobic digesters, solar) in late stages of development. With 4-6 month construction cycles, about half could be online by the end of 2026.
It’s a noisy, dynamic market situation in Pennsylvania. To refresh: Net Energy Metering (NEM) projects sell electricity to utilities at a “price-to-compare” rate (between wholesale & retail), as mandated by Pennsylvania law (AEPS Act) and Supreme Court rulings (Hommrich). They connect to the distribution system; any upgrades are paid for by the plant owner. The utilities & PUC don’t like it - inaccurately claiming NEM is the cause of rising electricity prices, when in fact, NEM is anchored in free market principles that mitigate costs to consumers.
The reality is utilities do not like it because they do not get a regulated return on NEM power. Two utilities (UGI and PPL) went so far as to propose discriminatory tariffs to NEM generators, resulting in a court case (UGI) and black box settlement attempts (PPL). The PUC mostly supports this illegal approach. Their posture makes it tough to finance projects, so power capacity sits unbuilt while Pennsylvania utility bills jump 20% YoY.
Legislation is the best path to getting “unstuck”. Pennsylvania State Representative Elizabeth Fiedler is drafting solutions to end Pennsylvania’s self-sabotage and wipe away the destructive uncertainty.
Here is why they are paying attention: A study by a Penn State professor found currently operating NEM solar saves ratepayers $340m in energy and $4.5b in capacity costs. A 75% expansion of NEM solar capacity would save ratepayers an additional ~$347 million in energy and $69 million in capacity costs.
Power demand has spiked; supply has not kept up. NEM Solar is not perfect, but it is actionable, fast, and affordable. While other states stare at 4-7 year gas turbine lead times and transmission upgrades, Pennsylvania has a card to play.
Utilities claim NEM electricity rates are a subsidy- they are wrong/lying. Procured electricity is a small utility bill component; trans./dist. are the biggies. NEM projects use existing grid infrastructure, with private capital paying for upgrades.
Splitting hairs over electricity cost is like refusing to bandage a gushing wound because the available band-aid isn’t your preferred color. Legislators are trying to lift the state’s gaze to the core challenge. If they succeed, Pennsylvania will save ratepayers ~$400m, create jobs and tax revenue, and take a first step toward energy abundance.
Politically, by getting NEM right, Pennsylvania can show the nation speed to power that puts people over politics. Don’t limit or “pick” - unleash every form of affordable power and economic growth to the state.
