The Lightning Plan Explained: PRESS, PACER, and Pennsylvania's Energy Package

Governor Josh Shapiro's "Lightning Plan," launched in March 2025, is a four-bill package designed to modernize Pennsylvania's energy framework simultaneously rather than piece by piece. Two of the four bills — PRESS and PACER — touch the credit and compliance market directly, and the other two — Community Energy and permitting reform — shape the supply side that any portfolio standard depends on. This article walks through how the four pieces fit together, why they were bundled, and what each one means for Pennsylvania energy buyers and Tier II AEC stakeholders.

Why a four-bill package

Pennsylvania has spent the last several years caught between competing energy policy instincts: it is the country's second-largest natural gas producer, a major coal and nuclear generator, and a state with rapidly growing data center load — but it has also seen its Regional Greenhouse Gas Initiative (RGGI) participation tied up in litigation and uncertainty since 2022. Standalone bills addressing any one of these realities have repeatedly stalled. The Lightning Plan was structured as a package so that the political trades happen across bills rather than within any single bill. The administration's bet is that the package can move where individual pieces could not.

The four pieces

The Lightning Plan bundles four legislative initiatives that are intended to move in parallel:

• PRESS — Pennsylvania Reliable Energy Sustainability Standard. A modernized energy portfolio standard intended to replace Act 213 with a 50% in-state low-carbon target by 2035 and a new three-tier resource map.
• PACER — Pennsylvania Climate Emissions Reduction Act. A carbon cap-and-invest program intended to replace Pennsylvania's contested RGGI participation with a Pennsylvania-specific statute.
• Community Energy — enabling subscription-based community-scale generation programs, with a particular focus on rural areas and underserved customer classes.
• Permitting reforms — siting and review timeline reforms for generation, storage, and transmission projects, intended to compress the interconnection queue and approval cycle.

PRESS: the new portfolio standard

PRESS proposes a 50% in-state low-carbon electricity target by 2035 and reorganizes alternative energy credits into three tiers (Tier I ~35%, Tier II ~10%, Tier III ~5%). Tier I expands to admit small modular reactors and fusion, Tier II is redefined around cleaner thermal and flexibility resources (CHP, fuel cells, hydrogen, storage, DSM), and a brand-new Tier III holds the legacy thermal resources that used to live in Tier II (waste coal, MSW, IGCC, wood pulping). For a full side-by-side breakdown vs. the current AEPS, see PRESS vs. AEPS.

For PA Tier II AEC market participants, PRESS is the bill that matters most directly. The other three pieces affect supply, demand, and the parallel allowance market — but PRESS rewrites the certificate framework itself.

PACER: cap-and-invest with consumer rebates

PACER would set a declining cap on power-sector carbon emissions in Pennsylvania and auction allowances to covered emitters. The structure is broadly similar to RGGI — periodic auctions, a declining cap trajectory, a market-clearing allowance price — but built into Pennsylvania statute rather than implemented by regulation. That distinction matters because the RGGI rulemaking was the target of litigation that has kept Pennsylvania out of the RGGI market in practice. A statutory program is harder to unwind in court.

The defining feature of PACER is the revenue split: approximately 70% of auction revenue is returned to ratepayers as direct rebates, with the remainder supporting energy programs (efficiency, workforce, transition support). The rebate share is what distinguishes PACER from a generic cap-and-invest program — it is meant to neutralize the consumer-bill argument that has historically defeated PA carbon pricing proposals.

For energy buyers, PACER is a separate market from AECs. Carbon allowances trade on their own settlement curve; AECs continue to settle compliance for the portfolio standard. The two markets layer rather than substitute: a CHP project, for example, could continue to monetize Tier II AECs under PRESS while a covered emitter purchases PACER allowances to cover its CO2. From a project-finance perspective, the two revenue streams are stackable.

Community Energy: opening a market that hasn't scaled

Pennsylvania has consistently underperformed neighboring states on community-scale solar and community-scale generation more broadly, largely because there has been no enabling subscription framework in PA statute. The Lightning Plan's Community Energy bill is intended to fix that — defining subscriber eligibility, bill-credit mechanics, and project sizing rules so that community-scale projects have a predictable revenue framework.

From an AEC standpoint, Community Energy is supply-side. Projects that come online under a community-energy framework will generate certificates and feed them into the appropriate tier (most commonly Tier I solar, but potentially Tier II for community-scale CHP, fuel cells, or biomass). It does not directly change the demand side of the AEC market, but it is one of the principal mechanisms by which the 50% in-state PRESS target gets satisfied with actual in-state generation rather than ACPs.

Permitting reform: the speed lever

The fourth bill addresses the timeline by which any of this generation actually gets built. PA's interconnection queue, siting review, and environmental permitting cycles are widely viewed as bottlenecks for new capacity. The permitting reforms in the Lightning Plan are oriented at shortening interconnection and siting timelines — not directly an AEC issue, but a major driver of how fast new qualifying capacity actually comes online to satisfy a PRESS-style 2035 target.

If PRESS passes without permitting reform, the most likely market outcome is sustained high cleared prices for in-state Tier I certificates and heavy reliance on ACPs to bridge the supply gap. If permitting reform passes alongside PRESS, the supply response is faster and cleared prices have more headroom to soften over time. The two bills are intentionally complementary.

What buyers should track

For anyone procuring PA Tier II AECs today, the two Lightning Plan pieces that matter most are PRESS (which restructures the certificate itself) and PACER (which introduces a parallel allowance market that may layer onto the same generator). The two non-market pieces — Community Energy and permitting — matter for long-term supply but don't reshape current contracts. The package was designed to move together, but legislatively the four bills can advance, stall, or be amended independently.

Bottom line

The Lightning Plan is the most coordinated attempt at Pennsylvania energy policy reform in a generation. PRESS rewrites the certificate framework, PACER rewrites the carbon framework, Community Energy opens a new generation channel, and permitting reform sets the speed at which capacity can respond. For Tier II AEC market participants, the most important thing to do now is to read existing contracts for PRESS-readiness and to begin modeling the layered economics of AECs plus PACER allowances on any new projects in development.

Follow legislative status in our PA Clean Energy Legislation Tracker.