This fact sheet examines how Pennsylvania can use its existing policies and infrastructure to meet its emission standards under the Clean Power Plan while minimizing compliance costs, ensuring reliability, and harnessing economic opportunities. Read about additional analyses in WRI's fact sheet series, How States Can Meet Their Clean Power Plan Targets.

Key Findings

Pennsylvania can build on its progress to date and achieve greater reductions by taking the following four actions:

  • Energy efficiency resource standard: The Act 129 Phase III Program (2016-2020) aims to achieve about 3.5 percent cumulative annual savings in 2020.

  • Alternative Energy Portfolio Standard (AEPS): 8 percent of electricity sold in the state to be generated by Tier I renewable sources (like wind, solar PV, landfill gas, wood, or black liquor) by 2021.

  • Increasing the use of existing natural gas plants. Combined cycle plants ran at 65 percent in 2013, which is below the levels they’re capable of achieving. Running existing plants at 75 percent could cut emissions further.

  • Increasing coal plant efficiency. Low-cost operational improvements and best practices at existing coal plants could cut emissions further.

Pennsylvania could meet—or even exceed—its mass-based emission targets by adjusting or removing the spending cap on efficiency programs while increasing the target to achieve about 13.2 percent cumulative annual savings by 2030 and increasing the Tier I alternative energy standard to 18 percent of the state’s sales by 2030. Doing so would cut CO2 emissions by 46 percent below 2012 levels by 2030. Pennsylvania can develop an implementation plan that maximizes the economic benefits to the state and achieves emission reductions cost-effectively by:

  1. Adopting a market-based carbon pricing program, which encourages cost-effective emission cuts and generates revenue that can be used for public investments or reducing taxes. The CPP encourages states to trade credits without formally joining a trading program. Assuming a $10 per short ton price of interstate emissions allowances, Pennsylvania could generate an average of over $160 million per year in revenue between 2022 and 2030 from out-of-state sources if it surpasses its CPP target by expanding Act 129 and AEPS and using infrastructure opportunities as described above.

  2. Investing in energy efficiency. Efficiency is one of the most cost-effective tools for Pennsylvania to cut its emissions while saving money for residents. Utilities exceeded the state’s Phase I efficiency targets, with a net $2.4 trillion in verified benefits.

Pennsylvania’s clean energy policies are already cutting CO2 emissions and other harmful air pollution while saving money for the state’s residents. However, to meet its CPP targets, Pennsylvania would not only need to take make better use of existing power plants but also expand Act 129 and AEPS past their current 2020-21 targets. Doing so would allow the state to scale up their benefits, reduce the need to invest in new natural gas plants, and achieve deeper reductions more cost-effectively. Adopting EPA’s new source complement target would further incentivize zero-carbon generation sources and ensure that future CO2 emissions from the state’s power sector do not continue to increase.

Executive Summary

On August 3, 2015, EPA finalized standards for existing power plants that will help drive additional CO2 emission reductions by 2030. EPA developed these state-specific standards by taking into account each state’s existing fossil fleet along with an estimate of the potential to increase the existing coal fleet’s efficiency, ramping down coal generation by increasing the utilization of the existing natural gas combined cycle fleet, and developing more renewable energy resources. The Clean Power Plan enables states to use a wide range of options to meet their standards, such as existing clean energy policies and electricity infrastructure (the focus of this analysis), other tools to cut electricity use and increase the use of renewables, and broader initiatives such as participation in a cap-and-trade program or use of a carbon tax.