And as evidence from all sides builds up regarding the issue, the debate may boil down to philosophical arguments over the role of government in the marketplace.

The House Consumer Affairs Committee heard testimony Wednesday on a bill that would require electric distribution and generation companies to increase mandated purchases of solar photovoltaic energy (PV) to address an oversupply of solar technology in Pennsylvania.

But the bill would also limit the availability of the solar credits to in-state solar companies that directly distribute electricity generated from solar power to a distribution system operated in the state.

Opponents of the regulation argued that the bill, introduced by Rep. Chris Ross, R-Chester, would give preferential status to solar energy over other generation sources. Others argued that the bill uses the law to adjust demand to meet the current oversupply of solar energy, a job they said should be left to the free market.

Bill supporters who testified – mostly owners of Pa.-based solar energy companies – said doing nothing will put many small companies out of business and cause many workers to lose their jobs.

Under the state’s Alternative Energy Portfolio Standards Act of 2004, 18 percent of retail sales from electric generator and distribution companies by 2021 must come from alternative energy sources: 10 percent from waste coal and hydropower, and 8 percent from renewable sources like solar, wind and biomass.

Rep. Chris Ross, R-Chester, the bill’s sponsor, said the legislation addresses “a specific imbalance” in the Solar Renewable Energy Credit (SREC) market, stemming from an oversupply of solar energy in Pennsylvania.

Ross also indicated that he intends to amend the legislation to make the mandated purchase increases to be neutral.

Under his amendment, there would be a 4.5 percent increase in SREC purchase requirements between 2012 and 2016, and a mandated decrease of 4.5 percent between 2019 and 2026.

Terry Fitzpatrick, president of the Energy Association of Pennsylvania, who opposed the bill, said the bill would remove the investment risk from the solar industry investor and put it on the consumer.

“This policy is the direct opposite of the policy that applies to the other generation sources, which are required to compete on the basis of cost,” he said. “Competitive energy markets benefit consumers by encouraging efficiency and innovation in the generation sector, while the policy behind HB 1580 encourages inefficiency and complacency.”

He said mandating distributor companies to purchase more solar PV technology could cost electricity ratepayers between $2.3 billion and $3.4 billion through 2021.

Fitzpatrick argued restricting the eligibility to in-state projects is “poor public policy,” and that it may well be unconstitutional, under the federal Interstate Commerce Clause.

“State protectionism is detrimental to developers who need to participate in a broader regional market for long-term profitability and feasibility,” said Jake Smeltz, of the Pennsylvania Electric Power Generation Association.

New Jersey, Maryland, Delaware and Washington D.C. have restrictions that limit out-of-state competition, Ross said.

“Many of the neighboring states whose laws require utilities to purchase minimum levels of electricity from solar and other alternative energy sources have limited the types of electricity that qualifies for marketing as SREC credit for ‘home grown’ electricity generation,” said Keith Masser, state board director for the PA Farm Bureau.

Masser said those states have restricted out-of-state solar energy producers from qualifying for SRECs in their state. Pennsylvania places no restrictions on which companies can qualify for solar energy credits.

“Generators in portfolio states outside of Pennsylvania have been able to dump excess SREC credits into Pennsylvania markets, increasing the supply-demand imbalance and depressing prices of SREC credits for Pennsylvania generators,” he said.

“Reasonable societies do not allow avoidable fatal market crashes where so many livelihoods are at risk, and the promise of cheap power is so close at hand,” Andrew Kleeman of Mercury Solar Systems testified. “I remind the committee that even the global icon of free markets, the New York Stock Exchange, has built-in stops and market freezes to preclude catastrophic collapses.”

Pennsylvania Chamber of Commerce President Gene Barr said his organization does not support the legislation because it would increase costs for chamber members.

“Government does not have a great track record of picking winners and losers in the energy market,” Barr said. “The concept of picking winners and losers is not something we support.”

Barr said the Chamber was opposed to the original AEPS legislation in 2004.

ERIE — Erie Mayor Joe Sinnott will be the guest speaker at the Manufacturer & Business Association’s January’s Eggs ‘n’ Issues briefing starting at 8 a.m. Thursday, January 19 at the Association’s Conference Center, 2171 West 38th Street at Pittsburgh Avenue. All media are invited to attend.

Cities across the nation are having unprecedented economic and social challenges. Join Mayor Joe Sinnott as he shares his vision and strategies to navigate Pennsylvania’s fourth largest city to meet these challenges head on.

To register for this briefing, contact Ann Miaczynski at 814/833-3200 or 800/815-2660. Cost is $30 for members, $60 for nonmembers.

Manufacturer & Business Association President Ralph Pontillo Among Selected

ERIE — The Manufacturer & Business Association announced today that Governor Tom Corbett has named Association President Ralph Pontillo and area business leaders Samuel “Pat” Black, president and CEO of Erie Management Group, Erie; David Barensfeld, president and CEO of Ellwood Group Inc., Ellwood City; Jim Rutkowski Jr., vice president of Industrial Sales & Mfg., Erie; and Greg Booth, CEO of Zippo Manufacturing Company, Bradford, to a new public-private council that will identify and prioritize top issues that can sustain and advance manufacturing in the Commonwealth.

“Manufacturing adds more than $75 billion in value each year to our state’s economy, and it is paramount that we do all that we can to preserve and support that sector of our economy,” said Governor Corbett, in a prepared statement. “The council will research issues and make recommendations that will further strengthen that industry and ultimately allow manufacturers to add jobs for Pennsylvanians.”

Led by the Team Pennsylvania Foundation, the council consists of 23 members from a cross-section of manufacturing, including heavy machinery, minerals, pharmaceuticals, plastics, steel and textiles. The group will focus on specific subjects, such as: taxes and the regulatory climate in Pennsylvania; talent and innovation; international markets; energy costs; efficiency; and research and development.

The council, which is co-chaired by Department of Community and Economic Development Secretary C. Alan Walker and Carlos Cardoso, chairman, president and CEO of Kennametal Inc., Latrobe, will meet over a six-month period, starting this January. The council then will issue a report to the governor and General Assembly that includes policy suggestions and a strategy to help Pennsylvania remain competitive in today’s global economy.

“The Manufacturer & Business Association is honored to be a part of the discussion on how we can reduce the economic roadblocks that impede manufacturing in our state and identify ways to foster a pro-business climate,” said Pontillo. “I look forward to working with my fellow council members from across the state on this most important issue.”

Other council members include: Heather Chandler, president, Sealstrip Corporation, Gilbertsville; Frank Epifano, CFO, sanofi pasteur, Swiftwater; Janis Herschkowitz, president, PRL Industries, Cornwall; Jeff Kelly, CEO, Hamill Manufacturing Company, Trafford; Todd Kennedy, president and CEO, McClarin Plastics, Hanover; Leroy “Tighe” King, chairman and CEO, Perform Group LLC, York; Daniel Langdon, president, East Penn Manufacturing Co., Inc., Lyon Station; Michael McLanahan, chairman and CEO, McLanahan Corporation, Holidaysburg; Louay Mishu, plant manager – Family Care, Proctor & Gamble, Mehoopany; Scott Meuser, chairman and CEO, Pride Mobility Products Corp., Exeter; Michael Pearson, president, Union Packaging, Yeadon; David Simpson, president, Diamond Manufacturing, Wyoming; Mike Williams, senior vice president, United States Steel, Pittsburgh; and Helen Yost, president, The Rowland Company, Philadelphia.