Budget Secretary Charles Zogby had previously stated that the state cannot afford the Senate plan, and that even a modest increase is “not sustainable beyond the 2012-13 fiscal year,” and “would move the state farther away from the goal of achieving long-term structural balance.” He noted that the state mandated cost increases over the next two years were more than $1 billion above projected revenue growth.

Senate Leadership maintains that this level of spending increase is indeed sustainable. Senate Appropriation Chair Jake Corman (R-Centre) said, “I fail to see how a less-than-2-percent spending increase takes us from fiscal responsibility to unsustainability, as they claim.”

“This plan does not create a single new program. It does not raise a single tax,” said Majority Leader Dominic Pileggi (R-Delaware). “This is a responsible, sustainable state budget.”

Restored areas of funding in the Senate plan include:

$245 million in funding for higher education – $147 million for state-related universities, $83 million for state-owned universities, $15 million for PHEAA;

$50 million for cash-strapped school districts;

$14 million in early childhood education;

$168 million in mental health and retardation services;

$18 million to the Keystone Conservation Fund.

During Tuesday’s Appropriations Committee meeting, the Capital Budget Act of 2012-13 (Senate Bill 1480) was also unanimously reported as committed.

Click here to view line-item spreadsheets of the Senate GOP proposal.
Click here to view House Bill 1466
Click here to view Governor Corbettt’s proposed budget.

The Commission voted 5-0 to finalize the procedures the PUC will use to implement, collect and distribute the impact fee as directed by Chapter 23 of Act 13. Due to uncertainty surrounding pending litigation, the Commission did not address the provisions of Chapter 33, which governs local ordinances that impose conditions, requirements or limitations on oil or gas operations.

The Final Implementation Order adopted today contains information on the: Chapter 23 Implementation plans; Producer report; Municipal budget report; and Impact fee disbursement report.

The PUC is responsible for implementing the provisions contained in Chapters 23 and 33 of the Act. Chapter 23 provides for the imposition, collection and distribution of an unconventional gas well fee (drilling impact fee). Chapter 33 governs local ordinances that impose conditions, requirements or limitations on oil or gas operations. For more information, visit the PUC Act 13 information page.

The bill’s author, Rep. Mike Reese (R-Westmoreland) told the committee that the hearing was the beginning of a much needed conversation on government mandates on energy usage and control of information. Rep. Reese went on to say that the issue of smart meters was brought to his attention by a constituent, and upon review, he believes that smart meters should be a choice made by consumers, not mandated by government.

The Committee’s Chair noted that smart meter technology has been used for more than 30 years, but became a mandate as part of electric conservation strategy deployed in Act 129 of 2008. The Act includes a 15-year roll out period for installation of smart meters. Electric utilities considered many factors prior to submitting their metering plans.

PUC Chairman Robert Powelson testified before the Committee that he supports the use of smart meters, citing many positive outcomes of the technology, including management of usage, outage management, faster restoration of power, and keeping fewer utility trucks off of the road.

Powelson went onto say that Act 129 creates regulatory certainty. It will be difficult for utilities to communicate with customers using old meters, eliminating the cost advantages of deploying the technology. As an example, Powelson explained that a utility can access all meters and within minutes determine which segment of the grid has an issue, helping to avoid outages or restore service faster.

Testifiers at the hearing, including representatives from PPL, the Energy Association of Pennsylvania, and the Retail Energy Supply Association, agreed that HB 2188 could be detrimental to the state’s electric management and conservation goals, and they support the continued deployment of smart meters.

PUC Issues for Comment Next Steps for Future Energy Efficiency, Conservation Programs; Announces Act 129 Stakeholder Meeting.

This will be a so-called “forward” auction, where certified credits will be sold at auction, delivered later and applied to 2012 and future compliance years. The auction will afford wastewater treatment plants in these two watersheds the opportunity to purchase credits as a means of meeting their nitrogen and phosphorus discharge limits for the compliance years.

PENNVEST has chosen Markit Inc. to provide the platform for enrollment and eligibility, auctions and registry services. For more information, visit Markit Inc. at www.Markit.com and select “Environmental Registries.”

PENNVEST anticipates charging buyers and sellers 2.5 cents per credit to offset administrative costs. For more information, visit www.pennvest.state.pa.us and click on “nutrient credit trading” on the left side of the page.

At the state level, Mitt Romney easily outpaced his opponents with about 57% of the vote, and finished the evening with what sounded like a GOP acceptance speech aimed at President Obama. In an earlier appearance at Consol Energy’s headquarters in southwestern Pennsylvania, Romney had blasted the president for being unfriendly to the coal and gas industries (see clip below.)

In the race for the state’s US Senate seat, Bob Casey, Jr. easily won his primary, and Tom Smith, a coal mine owner from Armstrong County, took more than one half of the GOP vote, far outpacing the endorsed Republican candidate Steve Welch and former State Rep. Sam Rohrer among others.

In row office elections, few surprises – the Attorney General race in the fall will pit uncontested Republican winner David Freed against Kathleen Kane, who survived an ugly primary fight to get the Democratic nomination.

For Auditor General, Republican State Rep. John Maher won 2-1 over Frank Pinto, and will square off against Democrat State Rep. Eugene DePasquale in the fall. State Treasurer candidates ran without opposition, and this fall, Treasurer Rob McCord will face Republican Diana Irey Vaughan.

Two sitting Congressmen lost their primaries, as Rep. Tim Holden (D, 17), the co-chairman of the Blue Dog caucus was defeated by Scranton lawyer Matt Cartright, and Congressman Jason Altmire, another moderate Democrat lost in a close race with Congressman Mark Critz.

Congressman Tim Murphy easily handled his well-financed Tea Party challenger Adam Feinberg by a 63-37 percent margin in southwestern Pennsylvania.

In the newly formed fourth Congressional district, State Rep. Scott Perry received more than 53 percent of the total vote, easily outpacing six other candidates in his effort to replace retiring Congressman Todd Platts.

State House
The House is currently under GOP control by a 110-87 margin with six seats being filled by special elections. After Tuesday’s elections, the Democrats picked up one net seat, leaving the chamber 111-92. ERG welcomes the six new members of the state House of Representatives, elected Tuesday to fill open seats left by resignations of the previous members.

Democrat Martin Schmotzer will assume the 22nd district seat in Allegheny County vacated when Chelsa Wagner (D) was elected Allegheny County Controller. In the 134th District, vacated by Doug Reichley (R), Republican Ryan Mackenzie takes over the Lehigh County seat. In Montgomery County, the seat vacated by Josh Shapiro (D) was won by Madeleine Dean, a Democrat. In Philadelphia’s 169th District vacated by Dennis O’Brien (R), Democrat Ed Neilson will become its Representative. Democrat Harold James, a former House member, will take back the 186th District seat in Philadelphia vacated by Kenyatta Johnson (D). And Democrat Gary Williams will take over the 197th District seat left open by Philadelphia Sheriff Jewell Williams (D).

There were some major surprises in the House primary elections, with Speaker Sam Smith winning a surprisingly close primary in Jefferson County, and several incumbents being defeated on both sides of the aisle. Republican Transportation Committee chairman Rick Geist was defeated by 56 votes in Blair County by conservative challenger John McGinnis. And the Democratic Chairman of the Consumer Affairs Committee, Joe Preston, lost his Pittsburgh seat by almost 2-1 after the Allegheny County Democratic party endorsed his opponent Ed Gainey.

Other incumbents upset in the primary were Democratic Reps. Kevin Murphy and Ken Smith in northeastern PA and Babette Josephs in Philadelphia. Rep. Tony Payton of Philadelphia withdrew after challenges to his nomination papers.

Several other sitting members won close primary races with less than 60 percent of their party’s votes.

Also of note, two vacancies have opened in the House this week after the announced resignations of Rep. Bill DeWeese (D-Greene), effective April 24, and Rep. Curt Schroder (R-Chester), effective May 6. DeWeese was sentenced Tuesday to 30-60 months of jail time, and has appealed his conviction. Schroder is accepting a job as senior vice president of the Hospital and Health Systems of Pennsylvania southeast region. The seats will be filled by special elections later this year.

State Senate
In the state Senate, Republicans continue to control the chamber by a 30-20 split.

Only four State Senators faced primary opponents. Majority Leader Dominic Pileggi easily outpaced Tea Party candidate Roger Howard by 3-1. Sen. Pat Vance of Cumberland County won her primary by a 57-43 percent margin, and Sen. Gene Yaw of Lycoming County both won primaries against conservative challengers, and Sen. Dave Argall of Schuylkill County defeated coal company president Brian Rich by 55-45.

In the most hotly contested GOP Senate primary, D. Raja, a businessman who ran for Allegheny County Executive in 2011, easily defeated Rep. Mark Mustio and Sue Means, a home school advocate in a race to replace retiring Sen. John Pippy.

First, most of the development is occurring on private land, and the greatest amount of development falls within the Susquehanna River basin. Second, a regional approach to siting drilling infrastructure is needed to help minimize development in core forest and productive agricultural lands and to decrease the potential risk to waterways.
MORE…

Reports have circulated that the meeting may have been cancelled due to Southern Senators who are concerned that the bill will end direct payments, which is a significant issue for rice and cotton growers.

There is also a discrepancy in projected savings over the next 10 years. The committee estimates $23 billion in savings, while a report from the Congressional Budget Office estimates savings will meet or exceed $26 billion.

While the committee has said that a new date and time for the rescheduled hearing will be announced shortly, there is urgency to act now. There may be as few as 60 working days left this year, and it is not certain if a lame-duck Congress would pass the farm bill.

A host of public officials, from the Governor to the state’s Congressional delegation and DCED, had worked with Shell to urge the company to come to western Pennsylvania. The plant, which is slated to be built near Monaca, Beaver County, would convert Marcellus Shale wet gas into shorter chain hydrocarbons such as ethylene and propylene to make other products like plastics.

Shell said it had signed an agreement with Horsehead Corp. to purchase the zinc smelter’s 300-acre property along the Ohio River in Potter Township near Monaca, 28 miles from Pittsburgh, for a petrochemical complex that will include a cracker and polyethylene and monoethylene units.

It will take at least two years until environmental permits are approved and construction of the cracker can begin, and another four years to build the $3 billion plus facility. Shell predicted building the plant and related projects would mean as many as 10,000 construction jobs. The plant is expected to employ several hundred people in specialized and technical jobs and to generate as much as $16 billion in private investment.

Ohio and West Virginia also had made pitches to attract the “cracker” plant, and both expect some positive economic impacts because of the Beaver County location.

Shell had already invested considerably in the Marcellus Shale play, having spent almost $5 billion in 2010 for drilling rights on 650,000 acres.

AFL/CIO officials have told ERG that the announcement could be the “most positive news for the union families of southwestern Pennsylvania in decades.”

Senate Bill 1257, sponsored by the committee’s Chair Sen. Jane Earll (R-Erie), consolidates several state funding programs including the Pennsylvania Industrial Development Program, First Industries Loan Program and Machinery & Equipment Loan Fund into one loan program. The amendment, also sponsored by Sen. Earll, enables the Liberty Financing Authority to issue limited obligation revenue bonds and other types of limited obligation revenue financing previously allowed under the sate Industrial Development Authority.

While Earll called the bill “a very well thought out piece of legislation,” Sen. John Blake (D-Lackawanna) remained concerned that small businesses might be pushed out of the running for money by larger companies or larger deals. Earll said that small businesses are vital the state’s economy and should not suffer unintended consequences from this legislation. Click here for a list of programmatic changes in SB 1257.

During the hearing, Coleman told the committee that the AEPS is having the intended effect and he is not necessarily a advocate of increasing standards; the PUC is ready to work with municipalities in implementing Act 13, new Marcellus Shale legislation; and while the state has not fully transitioned to a fully competitive electric market, more than 1/3 of consumers had switched to alternative suppliers.