Pennsylvania must act now to ensure its energy supply can keep pace with growing demand, PA Chamber Vice President of Government Affairs Neal Lesher told lawmakers Friday.

Testifying before the Pennsylvania Senate Republican Policy Committee, Lesher warned that Pennsylvania faces a growing gap between electricity supply and demand as power plants retire while demand rises.

“Pennsylvania stands at a critical crossroads in shaping both our own energy future and the nation’s energy future,” Lesher said in his testimony.

Pennsylvania remains a national energy leader. It is the nation’s second-largest natural gas producer and third-largest electricity producer, while ranking first in electricity exports and as a supplier of natural gas, coal, and refined petroleum products.

But the state’s energy mix has changed significantly. Citing data from the U.S. Energy Information Administration (EIA), Lesher testified that natural gas accounted for 59 percent of Pennsylvania’s electricity generation in 2023, up from just 1.5 percent in 2001; while coal’s share fell from 57 percent to 5.4 percent over the same period. Nuclear power accounted for nearly 32 percent of generation in 2023.

Lesher noted that the shift toward natural gas has also helped reduce Pennsylvania’s power-sector carbon dioxide emissions by 46 percent between 2005 and 2020.

Meanwhile, PJM Interconnection has projected that electricity demand will grow an average of 2.3 percent annually over the next 10 years.

Lesher said new generation is not being added quickly enough to replace retiring resources, putting reliability and affordability at risk.

“Without sufficient and reliable replacement generation from traditional baseload resources, available, dispatchable energy that can be quickly deployed to meet demand can be diminished and will put reliability at risk,” he said.

The consequences could mean higher electricity prices and disruptions for businesses, particularly manufacturers and other energy-intensive industries. Lesher said those pressures could also make Pennsylvania less competitive for new investment.

At the same time, he said data center development presents a major economic opportunity, potentially bringing in billions of dollars in investment, jobs, and tax revenue. However, capturing those benefits will require reliable, affordable power.

The PA Chamber supports an “all-of-the-above” energy strategy that maintains existing reliable generation while encouraging investment in new technologies, including hydrogen and small modular reactors. Lesher also called for continued investment in natural gas infrastructure and policies that support carbon capture and storage.

He urged policymakers to avoid policies that discriminate against reliable thermal generation, including carbon taxes, and called for continued electric grid modernization and permitting reform.

Lesher pointed to the bipartisan SPEED program and subsequent reforms as positive steps, but said more work is needed to reduce delays and provide greater certainty for businesses making major investments.

He also proposed creating a dedicated state energy department or strengthening the state’s existing energy policy functions to provide a centralized focus on Pennsylvania’s long-term energy needs.

“By embracing a forward-thinking energy policy that combines innovation, reliability, and economic growth, we can ensure a prosperous energy and economic future for all Pennsylvanians,” Lesher said.

Lesher’s full written testimony is available here