Pennsylvania
Power plants may win as PA eyes $2.6B tax credit rewrite
HARRISBURG — Companies have yet to claim a single dollar from a $2.6 billion tax credit package Pennsylvania enacted in 2022 to encourage natural gas use, hydrogen production, milk processing, and more.
Now, the Shapiro administration is floating a union-backed rewrite that would subsidize energy production and lower the bar to claim the credits. However, the legislature appears unlikely to take up such proposals before the end of the year.
The package includes four credits that would give tax breaks to companies if they reach certain investment and job creation benchmarks. One encourages the use of Pennsylvania milk to make dairy products, another incentivizes the production of hydrogen within the commonwealth, and a third promotes the making of semiconductors or conducting biomedical research.
The largest aims to reward companies for using Pennsylvania natural gas for manufacturing. First passed in 2020 and expanded in 2022, the credit authorizes up to $1.4 billion in tax breaks over 25 years to companies that use methane — a primary component of natural gas — to produce fertilizer or fuel. Texas-based Nacero announced such a facility for Luzerne County in 2021, but the company has repeatedly delayed the start of construction.
Without any takers for the credits, the Shapiro administration has circulated draft legislation that would convert the natural gas subsidy into one encouraging electricity production, according to a version of the bill viewed by Spotlight PA.
The new credit offers a power plant up to $100 million annually for three years. Facilities get less money if their prices exceed the average cost of energy as determined by PJM, the regional grid operator that serves Pennsylvania.
The proposed language does not restrict what type of fuel a power plant could use while claiming the credit. However, it says the energy produced should meet specific clean energy standards. These would likely include nuclear energy; renewables such as hydroelectric, solar, and wind; or, for fossil fuel-powered plants, the use of carbon capture to reduce emissions.
Rob Bair, president of the Pennsylvania State Building & Construction Trades Council, supports the concept.
The council represents tens of thousands of unionized electricians, carpenters, painters, and other construction workers who benefit from new projects, and holds considerable political sway, especially in an election year. Its constituent unions annually give millions of dollars to candidates and political committees.
Bair told Spotlight PA that he has pushed lawmakers to rewrite the program to encourage the growth of Pennsylvania’s energy industry, including nuclear, small-scale coal, and low-carbon hydrogen production. Doing so, he argued, could offset the loss of electricity generation and jobs caused by the shutdown of coal and gas plants.
“Let’s take the [tax credit] and let’s utilize it in a way that we incentivize electrical energy production in a clean, safe, environmentally friendly way,” Bair told Spotlight PA.
Backers of the original tax credit package included Bair, who argued the program would help Pennsylvania land several projects it was wooing at that time, including the Nacero plant to turn fracked methane into fertilizer, and a dairy processing facility.
Two years on, none of the projected facilities have landed in the commonwealth. Some went to other states, while others never materialized.
In a news conference last year, Democratic Gov. Josh Shapiro discussed lessons from a failed attempt to use the tax credits to attract dairy brand Fairlife. He named shorter permitting times and better financial incentives for companies as areas where he thinks the state could improve.
Shapiro underscored this goal in his 2024 budget address when he said he was “sick and tired of losing to friggin’ Ohio,” and argued Pennsylvania needs to cut red tape and develop shovel-ready sites for new projects.
Shapiro got both in the most recent state budget. The legislature gave the OK for Pennsylvania to borrow $500 million to provide grants or loans to encourage industrial development. It also approved a streamlined permitting process that allows companies to hire state-approved third-party reviewers in certain cases.
The draft bill circulated by the Shapiro admin would make it easier for companies in target industries to claim tax breaks by lowering the amount of money the businesses have to invest and the number of long-term jobs their projects must create.
Shapiro hasn’t said much publicly about his push to change the tax credits. During a news conference earlier this month, he said the “law is something that we … are considering how best to use for the benefit of Pennsylvania.”
A spokesperson for Shapiro told Spotlight PA the governor is “open to repurposing these tax credits to ensure they can be used effectively to create more jobs and opportunity.”
Other Democrats have largely stayed quiet on any brewing policy shifts, although some senior lawmakers have floated changes that acknowledge the credits must be rewritten to be useful.
State Rep. Rob Matzie (D., Beaver) proposed adding a subsidy that would support sustainable aviation fuel production, with a tax credit of up to $30 million each year. His ideas carry weight because he chairs the state House’s influential Consumer Protection, Technology, and Utilities Committee, through which major energy bills have passed in the past year.
Similarly, state Rep. Steve Samuelson (D., Northampton), who chairs the state House’s tax policy-focused Finance Committee, recently introduced a bill that would make the semiconductor manufacturing credit easier to claim.
State House Democratic spokesperson Elizabeth Rementer didn’t comment on whether chamber leaders would support a rewrite of the tax credits, but did say that the caucus is “constantly evaluating tax credit programs to ensure they’re being used properly and creating jobs.”
“If the … program is being underutilized it will be examined more closely,” she said.
Rewriting the program will likely be a harder sell in the GOP-controlled state Senate.
Majority Leader Joe Pittman (R., Indiana) said he hasn’t seen enough from Shapiro to be sold on the proposal.
“The administration spent a significant amount of time talking to outside interested parties on that issue … and spent no time talking to me or my team about what such a proposal would look like,” Pittman told Spotlight PA in August.
Pittman has personally been open to state programs to encourage energy production, repeatedly saying that he is interested in expanding small-scale nuclear reactors. He has also voiced concerns about the state’s long-term ability to produce enough energy for itself.
Other state Republicans are less inclined to hear Shapiro and the trades out.
State Sen. Kristin Phillips-Hill (R., York) voted against the original deal and said her skepticism of government handouts remains in place.
According to federal data, Pennsylvania is the second largest net supplier of energy to other states in the country. The excess energy goes to neighbors in Maryland and New York.
Those states, she’s argued, have allowed their fossil-fuel-powered plants to close while approving new data centers and other electricity-heavy industries powered by Pennsylvania.
As such, she argued that any subsidies offered by Pennsylvania would only subsidize other state’s “failed energy policies.”
“I just don’t see the benefit to Pennsylvanians,” said Phillips-Hill. “Am I going to support something that is going to continue to take Pennsylvania taxpayer dollars to subsidize the folly and irresponsibility of other states? Absolutely not.”
The Commonwealth Foundation, a conservative advocacy organization, recently put out an energy platform that echoes Phillips-Hill’s position, saying that it would not support any such tax credits or other state subsidies.
André Béliveau, the energy policy director at the Commonwealth Foundation, said that he understands the underlying impulse to bolster the industry and production. But he argues the legislature should do so by stripping back regulations and mandating that any changes to energy production maintain or improve grid reliability.
“We want to make sure we have reliable and affordable energy,” said Beliveau. “Subsidies are not the way to get there.”
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Some Pennsylvania towns make it easy to feel included within a day of arriving. In Lititz, summer concerts at Lititz Springs Park turn into informal reunions, with families setting up lawn chairs side by side and local shop owners joining once they lock their doors for the evening. In Boiling Springs, the path around Children’s Lake doubles as a daily check-in point where walkers greet each other by name before drifting into the cafés along Front Street. And in Ligonier, the Diamond and its bandstand pull residents downtown for markets and community events that rely on volunteers rather than outside organizers. The same pattern carries through the rest of the towns on our list.
Lititz
Lititz is in Lancaster County, about 6 miles north of the city of Lancaster. Founded in 1756, the town was named after a castle in Bohemia and initially served as a Moravian congregation settlement. Lititz is home to the Julius Sturgis Pretzel Bakery, established in 1861 as the first commercial pretzel bakery in the United States.
Lititz Springs Park, a historic community hub since 1756, hosts various yearly events, notably the well-known Lititz Fourth of July Celebration. For dining, the Appalachian Brewing Company provides locally brewed beers and a distinctive menu showcasing regional dishes. The Wilbur Chocolate Factory, a landmark since the late 1800s, includes a museum and shop where visitors can explore chocolate-making processes and buy unique confections.
Boiling Springs
Boiling Springs, in Cumberland County, owes its name to the natural artesian springs that maintain a constant temperature and were crucial to early ironworks in the area. Established in the 18th century, it is also part of the Appalachian Trail community, underscoring its long-standing connection to nature and history. The town’s historic district includes the Iron Furnace, dating to 1760 and a testament to Boiling Springs’ early industrial role.
The town features a variety of attractions for visitors and residents. Allenberry Resort and Playhouse, a historic venue since the mid-20th century, provides entertainment, dining, and lodging options. The Boiling Springs Tavern, founded in 1832, offers classic American cuisine in a historic environment. For outdoor enjoyment, Children’s Lake is perfect for fishing and relaxing walks, and the Appalachian Trail runs through the center of the community, offering great hiking opportunities.
Jim Thorpe
Jim Thorpe sits in the Lehigh Gorge in eastern Pennsylvania, and was originally known as Mauch Chunk and played a pivotal role in the coal and railroad industries. Renamed in 1954 to honor the legendary athlete Jim Thorpe, the town retains a Victorian era charm, with much of its architecture preserved and celebrated. This heritage is evident in attractions such as the Asa Packer Mansion, built in 1861 by a philanthropist and railroad magnate, which now serves as a museum.
Visitors to Jim Thorpe can choose from various recreation and dining options. The Lehigh Gorge Scenic Railway provides a scenic ride through the mountains, perfect for enjoying the area’s natural beauty. Dining choices include Moya, famous for its upscale American dishes, and Stone Row Pub & Eatery, offering a relaxed atmosphere with local ingredients. Outdoor lovers can enjoy boating and hiking at Mauch Chunk Lake Park, making the town an attractive destination.
Ligonier
Ligonier was established in the 1760s and features a rich colonial history highlighted by Fort Ligonier, a British fortification from the French and Indian War. The town square, known as the Diamond, is circled by original structures and a bandstand from the 19th century, reinforcing its historical ambiance.
Fort Ligonier functions as both a museum showcasing 18th-century artifacts and a venue for reenactments and educational activities. The Southern Alleghenies Museum of Art enriches visitors with American art exhibitions. Dining options in Ligonier include the historic Ligonier Tavern, known for its local cuisine, and The Wicked Googly, famous for its vibrant atmosphere and live music. For outdoor leisure, Ligonier Beach offers a distinctive swimming experience with a historic pool from 1925.
Wellsboro
Wellsboro, located in Tioga County, was established in 1806 and acts as the gateway to the Pennsylvania Grand Canyon, also known as Pine Creek Gorge. The town exudes nostalgic charm with its gas-lit streets and historic Victorian buildings, offering a window into its storied history. A prime example of this history is the Penn Wells Hotel, which has been serving visitors since the early 1900s.
For those wanting to explore Wellsboro, the restored 1920s movie theater, The Arcadia Theatre, regularly features films and performances, serving as a cultural center for locals and visitors. The Native Bagel offers a relaxed dining atmosphere with dishes made from locally sourced ingredients. Outdoor lovers can enjoy Leonard Harrison State Park, which offers stunning views of the Pennsylvania Grand Canyon, along with trails and picnic spots. Furthermore, the annual Pennsylvania State Laurel Festival attracts crowds with its parade, arts and crafts, and local food stalls, honoring the area’s cultural traditions.
Foxburg
Foxburg, situated along the Allegheny River in Clarion County, was founded in 1870. It is famous for being home to the oldest golf course still in operation in the United States, the Foxburg Country Club, established in 1887. This historical feature adds to its charming and distinctive character, blending small-town American charm with a deep golf tradition.
The Foxburg Wine Cellars offers tastings of locally produced wines, complemented by a scenic setting. For dining, the Allegheny Grille provides riverfront views alongside a menu featuring regional cuisine, emphasizing the town’s picturesque location. Culture enthusiasts can explore the American Golf Hall of Fame, located within the Foxburg Country Club, which houses a collection of golf memorabilia and artifacts. For outdoor activities, the nearby Allegheny River Trail offers miles of biking and walking paths, making Foxburg a destination with diverse appeal.
Honesdale
Honesdale serves as the county seat for Wayne County and was founded in 1826. It has historical significance as the terminus of the Delaware and Hudson Canal, pivotal in the transport of coal to major markets in the northeast. Notably, Honesdale is credited with being the site of the first commercial steam locomotive run on rails in the United States, the Stourbridge Lion, adding a rich layer to its industrial heritage.
The Wayne County Historical Society presents exhibits on canal and railroad history, shedding light on the town’s growth. For dining, visitors can choose the upscale Hotel Wayne, known for its fine dining and bistro bar, or the more relaxed Trackside Grill, offering views of the historic railroad. Outdoor lovers can visit Honesdale Park, which has walking paths and recreational facilities, serving as a popular venue for community events and gatherings.
Milford
Milford is situated at the crossroads of the Delaware River and the Pocono Mountains’ foothills. Established in 1796, it rapidly gained popularity as a resort in the 19th century, thanks to its scenic landscape and fresh mountain air. The town is also renowned for the Milford Historic District, which features a range of well-preserved buildings that reflect its prosperous history.
The Columns Museum houses the famous Lincoln Flag, believed to be stained with Abraham Lincoln’s blood from the night of his assassination, providing a profound historical experience. For dining, Bar Louis at the Hotel Fauchère offers a contemporary menu in a stylish setting, while the Waterwheel Café provides a rustic atmosphere with live music and local cuisine. Additionally, Grey Towers National Historic Site, the former home of Gifford Pinchot, founder of the U.S. Forest Service, offers guided tours and scenic grounds.
Mount Joy
Mount Joy was founded in 1759 and has a name derived from an old Irish ship, the “Mountjoy,” which played a pivotal role in breaking a siege during the Irish Confederate Wars. This town, nestled among the rich, rolling farmlands of the county, has historically been a hub for agriculture and today melds historic charm with modern vibrancy, evident in its revitalized downtown area.
Bube’s Brewery, an intact historic 19th-century brewery and museum, offers unique dining experiences in its catacombs and regularly hosts murder mystery dinners. The Country Table Restaurant is known for its comfort food and welcoming atmosphere, reflecting the town’s friendly spirit. For outdoor activities, Little Chiques Park provides scenic walking paths and picnic areas, perfect for family outings. Additionally, the annual “Mount Joy Winterfest” brings the community together with craft vendors, food, and entertainment, showcasing the town’s lively community spirit.
Lewisburg
Lewisburg is a vibrant town established in 1785. It is home to Bucknell University, established in 1846, which adds a youthful energy and cultural richness to the town. Lewisburg’s downtown is listed on the National Register of Historic Places, featuring well-preserved 19th-century architecture and a tree-lined main street that enhances its historic charm.
In terms of activities and dining, Lewisburg offers a variety of choices that cater to both residents and visitors. The Campus Theatre, one of the few remaining single-screen art deco movie theaters in the country, offers a unique cinematic experience. For dining, Elizabeth’s American Bistro provides a fine dining experience using local ingredients, while the Bull Run Tap House offers a more casual atmosphere with a comprehensive selection of craft beers. For outdoor enthusiasts, Hufnagle Park offers a green retreat in the heart of the town, complete with walking paths and garden areas, making it a popular gathering place for community events and casual recreation.
As we journey through Pennsylvania’s coziest corners, we discover that these small towns do more than just charm visitors with their picturesque settings and historical backdrops. They invite us into a world where community spirit thrives and every street and alley tells a story. These towns, from Lititz’s pretzel-perfumed air to Lewisburg’s university vibes, showcase the true heart of Pennsylvania through their unyielding warmth and hospitality. Whether you’re seeking a serene retreat or a peek into America’s storied past, these towns offer a refuge where friendliness is the native language.
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