West Virginia sues Pennsylvania over energy credit limits

(The Center Square) – West Virginia **sued**⁠ Pennsylvania, claiming its neighbor to the north illegally blocks its power producers from selling energy credits there.

Attorney General JB McCuskey filed this lawsuit late last week in a Pennsylvania federal court.

West Virginia argues that Pennsylvania violates the Commerce Clause by favoring its power producers over businesses from other states.

The lawsuit names the Pennsylvania Public Utility Commission, PUC Chairman Stephen DeFrank and Vice Chair Kimberly Barrow.

Pennsylvania requires power companies to get 18% of the power they sell from approved sources. Companies can meet that rule by producing that power or buying energy credits. Under the system, one credit equals one megawatt-hour of power.

When Pennsylvania started the program in 2004, it let approved power producers across the 13-state PJM Interconnection power grid sell credits in the state.

Since then, Pennsylvania has restricted that market.

The state passed a law in 2017 that forces companies to buy solar credits from Pennsylvania sources. In 2020, it passed another law putting similar limits on Tier II credits. Tier II includes power from waste coal, large dams, and trash incineration.

The laws apply to 10.5 percentage points of Pennsylvania’s 18% energy rule.

In 2020, about 40% of the Tier II credits used in Pennsylvania came from other states. By 2025, they all came from Pennsylvania producers. Meanwhile, Pennsylvania producers supplied 39% of the state’s solar credits in 2017. That number reached 99% in 2025.

The new rules cut the number of sellers. Yet, power companies still had to buy the same number of credits.

The smaller supply contributed to price increases.

PUC **reported**⁠ that the average price of a Tier II credit rose from $1.92 in 2020 to $26.92 in 2025.

Tier II costs jumped from $3.6 million to over $367 million during that time. The PUC called the price increase “meteoric.”

“Given this increase in demand and other factors affecting wholesale prices, a reassessment of Act 114 is appropriate,” the agency said.

West Virginia says its power producers missed out on over $25 million in sales in 2025.

The state says those losses will top $895 million over the next 10 years. It says over $120 million of that money could have lowered power bills for West Virginia customers.

Pennsylvania’s rules keep at least 10 West Virginia power producers out of the market, the lawsuit says.

West Virginia wants the court to end the in-state limits and let producers across PJM compete for sales. The lawsuit doesn’t challenge Pennsylvania’s 18% energy rule.

This story originally appeared on thecentersquare.com.