CEO Council for Growth Chairman Rob Wonderling submitted the following testimony on City Council Resolution 150072, which authorized the creation of a “Special Committee on Energy Opportunities for Philadelphia,” to continue to investigate the potential to establish the City of Philadelphia and the region as an energy hub. A hearing was held on Friday, March 13th to discuss more about the ways that Philadelphia can become an energy hub. Below is the testimony:

Statement of  Rob Wonderling on City Council Resolution 150072          

 March 13, 2015  

City Council should be commended for holding public hearings to fully explore opportunities to establish the Philadelphia region as an energy hub.

 

As Council hears testimony today from witnesses interested in creating public—private partnerships to further the goal of creating an energy hub in Philadelphia, the Greater Philadelphia Chamber of Commerce would like to explain its own ongoing work to make that important strategic goal a reality.

 

Under  the leadership of Philip L. Rinaldi, Principal Partner and CEO of Philadelphia Energy Solutions, and the leadership of other energy-related entities, the Chamber has developed the Greater Philadelphia Energy Action Team (GPEAT), which is working to increase the supply of natural gas and natural gas liquids to the City of Philadelphia and to southeastern Pennsylvania. Increasing the supply of natural gas to the region will enable downstream growth in industries like the chemical and petrochemical industries as well as other heavy energy-consumers, like power plants and advance manufacturers. The southeast region of Pennsylvania needs to enhance its access to Marcellus shale gas by increasing pipeline capacity from the shale resources in western and northeastern Pennsylvania.

 

Adding additional pipeline capacity will allow more natural gas and gas liquids to flow into Greater Philadelphia – which will provide a strong, competitive advantage to chemical and petrochemical companies already here – and to those considering locating new facilities here. An expanded pipeline capacity = more jobs in Philadelphia.

 

City Council can and should use its authority to convene citizens and stakeholders to consider the expansion of our pipeline capacity to  Philadelphia, and work with the business community and these stakeholders to approve any legislative steps as needed to make this a reality.

 

The Chamber supports considering innovative financing models to facilitate the investment in expanded pipeline capacity and to support the development of other energy-related investments. Specifically, the Chamber encourages City Council to consider partnerships between the public sector and the private sector, commonly referred to as P3s, to share the risk and rewards of building, operating and financing traditionally public-owned assets. The Chamber believes that there are a number of benefits that inure to the city when partnering with the private sector on large scale energy investments. P3s traditionally are utilized to: (1) mitigate or transfer risk to the private sector; (2) leverage under-performing infrastructure, like utilities, parking assets or mobility assets and improve the benefits to the citizenry; and (3) enable private sector operating discipline and innovation to running critical infrastructure assets. We encourage City Council to considering the P3 model as we collectively work together to pursue the development of an energy hub in this region.

 

Moreover, when the Chamber last testified on these issues in November, it listed a series of action steps which Council should continue taking to help make an energy hub come into being in Philadelphia.  The first action step is working with the business community to increase pipeline capacity, as outlined above. Here are those other recommended action steps, in summary form

 

 

Action Step 1:  Expand the city’s existing Job Creation Tax Credit program to incent manufacturing and energy companies to locate and create jobs in Philadelphia.

 

We recommend expanding the existing tax credit (off the Business Income and Receipts tax) further for manufacturing and energy sector businesses.

 

Action Step 2:  Preserve By-Right Zoning in Industrial Corridors

 

While there is a large amount of residential and commercial development happening across the city, we need to preserve large scale industrial zoning. It is particularly important to do so along the Lower Schuylkill Riverfront and portions of the Delaware Waterfront, since those locations are close to needed infrastructure like rail lines, ports and highways. These tracts of land are a vital component of attracting new companies; we cannot become an energy hub without them. .

 

Action Step 3: Expand vocational technical training curriculums at city colleges and high schools that align to the needs of manufacturers

 

City Council and the Mayor have an opportunity to set in local ordinance and state law specific steps for the Philadelphia School District to implement more vocational and technical training programs. The School District has just begun to seek partnerships with industry leaders to introduce students to careers in energy or manufacturing.

 

City Council can also influence the Community College of Philadelphia. At present, CCP has no program or curriculum around manufacturing technology. President Generals has begun to focus on developing curriculum around manufacturing technology and manufacturing and process engineering. Council should strongly advocate for this action step.

 

There are other steps that Council can take, and the Chamber and GPEAT welcomes the opportunity to work together with Council to achieve them:

 

-Create an overlay zoning district for manufacturers of liquid gas by-products;

-Create a STEM investment tax credit for companies that retrain city residents for such jobs;

-Further reductions in the city’s business income and receipts tax.

 

After a half century of job loss and population decline, Philadelphia is growing again. Our population has inched back above 1.5 Million residents, but we need job creation and pro-growth economic policies to continue to grow the economy in this region. Manufacturing jobs generally – and manufacturing employment that is energy-related specifically – pay higher wages that better support our families, neighborhoods and growth citywide.

 

On behalf of the Chamber and GPEAT, we look forward to working with every member of City Council to facilitate the creation of the next energy hub city here in Philadelphia – and to catalyze the new jobs, economic opportunities and growth that come with it.