Things are heating up in Pennsylvania, especially for our electrical grid.

The Pennsylvania-New Jersey-Maryland Interconnection (PJM), the grid manager for the commonwealth plus twelve other states and the District of Columbia, is worried about our future energy needs. As existing power plants come offline and lawmakers seek to replace them with woefully inadequate alternatives, PJM estimates electricity shortages as early as 2027.

The debate on Pennsylvania’s troubling energy future has two policy choices: continue with Gov. Josh Shapiro’s preference for picking winners and losers, or seek legislation to give producers and consumers the freedom to replace political agendas with a regulatory framework prioritizing reliable, affordable energy.

The governor’s energy proposals would decrease the amount of dependable power, risking reliability for Pennsylvanians and neighboring states that depend on Pennsylvania generators. The Pennsylvania Climate Emissions Reduction Act (PACER) would take an estimated $499 million annually from the economy through a carbon tax on energy producers. The Pennsylvania Reliable Energy Sustainability Standard (PRESS) would subsidize expanding expensive, unreliable (intermittent) wind and solar energy, while cutting reliability in half.

Meanwhile, the Republican-led Senate (with Democrat support) passed Senate Bill (SB) 269 to eliminate the gross receipts tax on electricity bills. Including a reduction in the personal income tax, SB 269 would decrease the annual tax burden by $3 billion.

While the Pennsylvania Senate would reduce what the government takes from citizens, the governor would seize more and give back some. PACER would return 70 percent of its tax proceeds to energy customers and allocate the remaining revenue to “green energy” priorities.

This shell game is a bad deal for everyone except the favored few businesses whose competitors the carbon tax would eliminate. The losers are owners and employees of shuttered power plants, communities with fewer jobs and a smaller tax base, and families and businesses paying the higher costs of unreliable energy.

Most taxpayers will see very little, if any, of the plunder. The return on their “investment” in this economic travesty is impoverishment.

Addressing the political distortions of the energy market is essential to keep Pennsylvania’s energy affordable. The Independent Energy Office, as proposed in legislation by state Sen. Gene Yaw, would provide its analysis of policy proposals without regard to special interests. Honest examinations of technological choices could avoid the closure of reliable power plants at a time of impending energy shortages.

Another proposal by Yaw would deny counties that sue energy companies over supposed climate issues the revenues of state impact fees collected from the natural gas industry. Yaw’s announcement followed news that Bucks County, which has received $6.7 million in fee proceeds, would file a suit patterned after the legal actions of climate activists around the country.

Regulatory issues also drive up state energy prices. Shapiro’s administration is known for levying hefty fines for even minor infractions. A recent example is a Pennsylvania Department of Environmental Protection assessment of nearly $10 million against Shell’s ethane cracker plant in Beaver County, which denied violating air standards.

Energy production would benefit from more reasonable regulations and more timely permitting, according to Jim Panaro, the executive vice president of Robindale Energy. Robindale reclaims land from waste coal piles that the company burns in three western Pennsylvania power plants.

Although Robindale only removes material from land surfaces, it spends two to three years securing the same mining permits required of operators who excavate hundreds of feet into the earth.

Permitting reform is among Republican proposals to address the state’s 166,000 regulations impeding economic growth. However, numerous bills languish without the Democrat support needed to advance them.

So far, Shapiro’s response has been an offer to return permitting fees to dissatisfied applicants and the formation of an Office of Transformation Opportunity to “facilitate the implementation of transformational economic development projects.” Both fall short of the extensive regulatory rehabilitation required.

What makes more sense: extracting money from producers and doling out rewards to specific government-favored operators, or setting the rules to reward companies that produce affordable power and practice good stewardship, leaving the environment better than they found it?

Shapiro’s approach would make energy more expensive and less available. And the clock is ticking for him to offer genuine, feasible solutions before our energy shortages start.

Gordon Tomb is a Senior Fellow with the Commonwealth Foundation, Pennsylvania’s free-market think tank.