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Two competing alternative energy bills (Special Session H.B. 1 and Special Session S.B. 1) now vying for approval in the General Assembly have one thing in common – both reject the Rendell administration's proposed tax on industrial, commercial and residential users of electricity.

PA Chamber members opposed the electricity tax – which carried with it an approximately $75 million price tag – from the start for its potential negative impact on business. While the tax as proposed by the governor would have been capped at $10,000, the cap didn't take into account the size of a business. Energy-intensive companies such as grocery stores and hospitals would have been hit particularly hard.

The chamber remains concerned, however, with proposed borrowing for energy projects, believing that Pennsylvania can pursue alternative energy without significant levels of bond debt and minus government mandates. This is especially true since Pennsylvania already created a market for alternative energy with 2004's Alternative Energy Portfolio Standards Act. Allowing the free market to work as is already is occurring is the preferred option for the business community.

Special Session H.B.1 would call for $850 million in bond debt to pay for various alternative energy projects. The fund would be paid for using anticipated increases in the existing electricity Gross Receipts Tax as a result of the scheduled lifting of rate caps rather than through a new electricity tax (PDF).

The Senate's energy plan calls for less new borrowing - $250 million – and the use of existing revenue sources for energy projects, and focuses on tax credits, rebates, loans and grants to help reduce pollution, conserve energy and attract energy companies to Pennsylvania.

The PA Chamber has taken no official position on either plan. While pleased that the ill-advised electricity tax appears off the table in the debate, concerns remain in the development of an effective energy plan for the Commonwealth. The chamber will continue working with lawmakers to resolve these concerns.

More information about the PA Chamber's opinion on an energy strategy for the Commonwealth can be found in the "newsroom" portion of the PA Chamber website under the Setting the Record Straight section.