2.26.25 - Senate DEP Budget Hearing Overview

Senate Budget Hearing Recap: Department of Environmental Protection

The Senate Appropriations Committee convened a budget hearing with the Pennsylvania Department of Environmental Protection (DEP), led by Secretary Jessica Shirley, Executive Deputy Secretary Ramez Ziyadeh, and Energy Office Director David Althoff. The discussion focused on permitting reform, energy reliability and affordability, PJM capacity concerns, federal funding delays, and orphaned well plugging.

The hearing reflected both bipartisan concern over energy capacity and cost pressures, as well as ongoing scrutiny of DEP’s operational performance and environmental programs.

DEP Budget Overview

DEP’s total proposed budget is $4.1 billion, including:

• $294 million from the General Fund
• $3.4 billion in federal funds
• $414 million from other sources

The General Fund portion represents a relatively small share of DEP’s total funding, underscoring the department’s reliance on federal dollars and special funds.

Permitting Reform and Processing Improvements

The hearing opened with questions about DEP’s efforts to modernize and accelerate permitting.

Measurable Reductions in Review Times

Executive Deputy Secretary Ziyadeh provided specific metrics showing significant reductions in processing times across several permit categories:

• Chapter 102 (Construction Stormwater) Individual Permits
  Reduced from 148 business days (2017–2022 average) to 119 business days
• General NPDES Permits
  Reduced from 131 business days to 104 business days
• Dam Safety Permits
  Reduced dramatically from 518 business days to 228 business days
• Air Quality General Permits
  Reduced from 52 days to 20 days
• Minor Source Air Plan Approvals
  Reduced from 163 days to 136 days
• Title V (Major Source) Air Permits
  Reduced from 453 days to 174 days
• Oil & Gas ESCGP Permits
  Reduced from 66 days to 48 days

DEP attributed improvements to internal process reforms, better tracking systems, and enhanced communication with applicants. Secretary Shirley emphasized that complete applications remain the biggest driver of faster approvals.

SPEED Program

The relatively new SPEED (Streamlining Permits for Economic Expansion and Development) program was also discussed.

• 13 applications currently under review
• 3 permits issued (2 air quality, 1 NPDES)
• At least one repeat applicant has already used the program again

DEP reported positive feedback from industry stakeholders and noted improved transparency through online permit tracking tools.

Interagency Coordination for Economic Development

Senators questioned DEP’s coordination with the Department of Community and Economic Development (DCED) and the Governor’s Office of Transformation and Opportunity (OTO).

DEP described:

• Regular interagency meetings on large investment projects
• Active tracking of energy-related projects
• Coordination with PennDOT, river basin commissions, and conservation districts
• Early-stage troubleshooting to identify sewage capacity, land use, and infrastructure barriers

DEP stressed that early coordination is essential for complex development projects.

Energy Affordability and Reliability

Energy reliability and rising electricity costs dominated much of the hearing.

RGGI and Energy Prices

In response to concerns about the Regional Greenhouse Gas Initiative (RGGI), Secretary Shirley stated that although RGGI was announced in 2018, it was never implemented in Pennsylvania, and therefore likely did not materially impact electricity prices

Instead, DEP identified several major drivers of price increases:

• Natural gas prices have increased approximately 200% since 2018
• Pennsylvania generates nearly 60% of its electricity from natural gas
• Pennsylvania electricity exports have increased 60%, driven by demand in neighboring states

DEP emphasized Pennsylvania’s role as the nation’s top electricity exporter and the growing pressure within the PJM regional grid.

PJM, Baseload Generation, and Capacity Concerns

Senators raised significant concerns about supply constraints, growing demand from electrification and data centers, and PJM interconnection backlogs.

PJM Queue Delays

DEP acknowledged:

• Two natural gas plants in Pennsylvania are currently in the PJM interconnection queue.
• DEP does not believe permitting delays are the primary bottleneck in these cases

Secretary Shirley cited the Homer City redevelopment as evidence that DEP can move quickly on major projects.

Homer City Example

DEP recently permitted the redevelopment of the Homer City site—replacing a retired coal plant with what was described as the largest natural gas-fired plant in the country. The air permit was issued in approximately seven months, which DEP characterized as record time

Senators noted, however, that certain projects (including Homer City and Three Mile Island redevelopment discussions) may serve dedicated users rather than the broader grid.

Broader Energy Debate

Senator Yaw emphasized:

• Supply-and-demand fundamentals are driving prices.
• There is a 5–7 year backlog for turbine equipment nationally.
• Ohio is reportedly pursuing a 9,200 MW project that could challenge Pennsylvania’s export leadership.
• Pennsylvania must act aggressively to maintain its competitive energy position

The exchange reflected a broader policy divide over how quickly Pennsylvania must scale baseload generation to remain competitive.

Governor’s “Lightning Plan”

Secretary Shirley referenced the Governor’s proposed “Lightning Plan,” which seeks to modernize outdated energy statutes (some dating back to 2004–2008) to reflect changes in the energy landscape

While details were not fully discussed in the exchange, DEP framed the plan as part of a broader affordability and modernization strategy.

Energy Storage and Demand-Side Solutions

DEP highlighted two immediate policy priorities:

1. Energy Storage

Secretary Shirley emphasized the importance of storage capacity, arguing that electricity is uniquely treated as an on-demand product without meaningful storage buffers. She suggested expanded battery deployment could reduce peak price volatility and shave high-cost demand spikes

Some senators expressed skepticism about near-term storage scalability, arguing that supply-side generation must remain the immediate focus.

2. Federal Energy Efficiency and Solar Funds

DEP reported that:

• $260 million in federal HEAR/HER home energy efficiency rebates is ready but awaiting federal DOE approval.
• $156 million in EPA “Solar for All” funding was recently rescinded (“clawed back”)

DEP stated it is prepared to deploy the funds immediately if released.

Orphaned and Abandoned Well Plugging

Significant time was devoted to oil and gas well plugging.

Scope of the Problem

DEP reported:

• Approximately 30,000 verified orphan/abandoned wells on its official list.
• An estimated 200,000–300,000 total legacy wells statewide, based on historic drilling dating back to 1859

Plugging Progress

• Roughly 371 wells plugged since 2023
• Federal grant funding has supported expanded efforts

Cost Improvements

DEP reported a reduction in average plugging costs:

• Initially near $100,000 per well
• Now closer to $45,000 per well

Capacity and Procurement Challenges

DEP acknowledged:

• Contractor capacity constraints
• Procurement inefficiencies
• Growing pains in scaling a new federally funded program

The department indicated it may seek legislative changes to expand participation, particularly to smaller contractors, and streamline the Orphan Well Grant Program

Senators emphasized that at current plugging rates, full remediation would take decades without structural reform.

Key Themes from the Hearing

• Permitting performance metrics show measurable improvement.
• Energy reliability and affordability are now front-and-center concerns.
• PJM interconnection delays remain a major structural bottleneck.
• Pennsylvania’s electricity export leadership is both an asset and a pressure point.
• Federal funding uncertainty is affecting efficiency and solar deployment.
• Orphan well remediation requires structural and procurement reform to scale.