Today Governor Rendell announced a clean energy pack-age that blends progressive policy with the muscle of big bucks: $850 million bucks to be exact. This funding will boost energy conservation and renewable energy supply and cut peak electricity usage. By doing so, the package will protect electric system reliability and also save con-sumers $10 billion over the next 10 years, with the typical residential consumer saving $73.00 per year, the average commercial customer $425, and the average industrial consumer $10,500.

Apart from saving consumers money and protecting reli-ability, the package will also help bring more new clean energy companies to Pennsylvania, attracting private in-vestment and creating good-paying jobs in manufacturing and other sectors.

The $850 million of funding will be a mix of grants, loans and rebates to support the goals of the Alternative Energy Portfolio Standard (AEPS). Specifically, it provides funding for solar, wind and renewable power generation, for en-ergy conservation, to reduce peak electricity demand, and attract new clean energy companies and jobs. The pack-age is broad and deep, covering all the bases of smart energy policy, including giving consumers the right to have metering that would voluntarily allow them to cut usage in peak demand periods and be paid for doing so. It leaves no doubt that Governor Rendell is determined to change how energy is used and produced within Pennsylvania, in a revolutionary and permanent manner.

The package calls for a statewide Systems Benefit Charge (SBC) of 0.05 cents per kWh (that’s five one-hundredths of a cent) on all electricity sold in the state. The proposed SBC would create approximately $72 million per year. It will have a minimal impact on the average residential con-sumer, adding only $4.00 a year to the electric bill, while again saving $73.00 for a net savings of $69.00 per year. For large industrial consumers who can use millions of kilowatt-hours, the proposal also caps the total payment any single customer will be required to make at $10,000. The annual revenue stream of $72 million will be for-warded to the Pennsylvania Treasury and used to secure $850 million of bonds.

While Pennsylvania is just now coming to a SBC, New Jer-sey, New York, and all six New England states already have a clean energy charge in place, ranging from 0.14 cents per kWh to 0.3 cents per kWh — three to six times the proposed charge in Pennsylvania. Annual funding levels range from $8.2 million in Maine to $130 million in New Jersey and $208 million for New York’s state authorities.

Pennsylvania’s package will be administered by the Penn-sylvania Energy Development Authority (PEDA) and the Pennsylvania Department of Community and Economic Development (DCED) through Ben Franklin Technology Partners. The package includes classic technology incen-tives/rebates for solar energy and HVAC/refrigerators, and generous project financing grants and loans for renewable energy, solar, and energy efficiency, conservation and demand response technology projects and businesses.

Enhancing the AEPS Solar Share:
The Pennsylvania AEPS has one of the largest solar set-asides in the nation, requiring some 858 megawatts by 2021, but the ramp-up period is very gradual. This new initiative creates a $200 million Pennsylvania Sunshine Program. This three year jumpstart program will provide rebates of $2.00 per watt to residential and small business customers for solar installations up to 20 KW, with an addi-tional $2.50 per watt for using panels manufactured in Pennsylvania. The program could cut the cost for a solar system in half for consumers. It also provides a production grant of $.50 per watt to manufacturers for panels and cells manufactured and deployed in the Commonwealth. Clearly its intent is to encourage homegrown solar capac-ity and growth opportunities. The other company and project incentives as discussed below will also support development of a Pennsylvania solar industry.

Air Conditioner/Refrigerator Incentives:
To provide consumers with more tools to reduce their en-ergy bills, $44 million will be provided as rebates to Penn-sylvania retailers to encourage residential and small busi-ness customers to replace inefficient room air conditioner units and refrigerators with products of at least 15 percent better efficiency than standard. This program is intended not only to save the consumers money on their bills, but will also cut peak demand, which in turn lowers electricity prices for everyone.

Portfolio of Grants and Loans to Stimulate Project and Company Development:
PEDA will also administer a $50 million Clean Energy Pro-ject Grants program to further stimulate Commonwealth renewable energy and energy efficiency projects. In addi-tion, there will be a $250 million Project Loan Fund, co-administered by PEDA and DCED. The loans will be sub-ordinated debt, and interest rates will be two to three points below prime with a maximum loan of $25 million. This is designed to lower the risk profile of a project to allow conventional funding.

Grants and Loans for Green Buildings and Brown-fields Development:
This is a $50 million grant and $100 million loan program focused on developing site infrastructure for those sites which will house either a clean energy business and/or will use the green building LEED™ (Leadership in Energy and Environmental Design) standards in site development and building construction. Staff from the Department of Envi-ronmental Protection (DEP) and DCED will evaluate the applications, PEDA will make the award, and DCED will administer the loans.

Clean Energy Capital Assistance Program:
This grant program will be administered by the Office of the Budget to acquire, construct, and improve regional en-ergy projects. Recipients must meet a 50 percent match requirement and reimburse expenses incurred.

Incubating and Building Clean Energy Businesses:
The governor’s Clean Energy Initiative provides $56 million for greenhouse incubator funds. The funds will be adminis-tered by DCED/Ben Franklin Technology Partners for early stage business incubator support, Entrepreneur in Resi-dence programs, commercializing research or as opera-tional capital to prepare an early stage company for a first round of venture funding.

The second stage of this funding is a $50 million Clean Energy Venture Capital Fund. It is designed to attract and leverage venture capital investments in early and expan-sion stage Pennsylvania-based clean energy companies. It will also be administered by DCED.

But Wait - There’s More:
The funding is expected to be accompanied by a number of legislative initiatives that have not yet been released. The full effect of the initiative will not be understood until that time. In addition, the Rendell energy package will in-clude a biofuels program to produce 900 million gallons of biofuels within Pennsylvania. The governor will also be releasing his global warming policy within the next 90 days.

Stay tuned for a comprehensive analysis of the total pack-age.

The governor’s approach - investing in new technology and products, while guaranteeing that Pennsylvania’s businesses and consumers benefit - will not only reap enormous economic growth and thousands of Pennsyl-vania jobs. By jumpstarting the renewable energy market and boosting energy conservation, we will grow Pennsyl-vania’s economy, improve and protect our environment, make our air and water cleaner and reduce the public health threat to millions of Pennsylvanians who suffer from asthma and other breathing problems and heart disease, protect our citizens from increasing electricity costs, and enhance our energy security. This plan will save Pennsylvania families and businesses hundreds of millions of dollars when fully in force.

Governor Rendell has formulated an extraordinary energy package that will enjoy both Republican and Democratic support in the General Assembly. The package as a whole will change - powerfully and forever -how energy is used and produced in Pennsylvania.