Q&A with Brian Regli

Since Gov. Josh Shapiro took office in 2023, he’s spoken numerous times about how he wants to invest in the commonwealth’s future. One of the point people for this mission is Brian Regli, executive director of the Office of Critical Investments within the governor's office. 

Regli, who helps leverage federal investment and tax credits available to the state and localities through legislation like the Inflation Reduction Act, is focused on setting up Pennsylvania for a brighter future, particularly in the energy sector. City & State spoke with Regli on his role in the administration, priorities in utilizing federal investment and what Pennsylvania can do to set itself up as an energy leader in the future. 

The following conversation has been edited for length and clarity.

Can you speak on the Office of Critical Investments role and what you do there?

The governor likes to say he’s competitive as hell; my job is to be as competitive as hell at the federal level. The goal here is to take the transformative power of the Inflation Reduction Act in particular and turn that into an engine for the energy transformation of the Commonwealth of Pennsylvania. 

There’s direct funding under the IRA – literally hundreds of billions of dollars – to help spur clean energy development. But there are also tax credits in the IRA that are sometimes a bit less understood. For example, there is a lot of money in the IRA for making the grid better and more resilient. Obviously, we can’t have a deep decarbonization policy without having a strong, resilient grid that delivers reliable electricity to the commonwealth. We’ve already competed for and won more than $150 million from the Department of Energy – but it’s not just about rolling out those programs – it’s about bringing the companies to Pennsylvania that are going to produce the molecules that are eventually going to go into those pipelines to create green steel, create green cement and create products that are not only economically viable but environmentally sound. 

The IRA gives us a chance to compete like hell for every single one of these dollars and ensure that Pennsylvania retains its position as an all-of-the-above energy state that has all kinds of opportunities to lead the transformation of the energy complex in the United States.

What else would you like to see from Washington in terms of helping states facilitate that energy transformation you mentioned? 

This is where the tax credits come in. This is not where the feds have come up short but where we, as a community of political leaders and social leaders, need to communicate the value of those tax credits and make sure they're used for the maximum benefit. 

The way the IRA was written, there are a couple of different layers at which the investment tax credit could work. If I’m going to build a million-dollar solar array … I want to have my own array and I want to have my own batteries – it costs me $1 million. With the tax credit as it’s written, I get 30% of that back in the form of a tax credit – I get a $300,000 tax credit. If I use the appropriate labor – qualified workers and apprentices with appropriate wages – I get 30% of my investment back. If I use domestically manufactured materials, I get another 10% back – $400,000 back from the federal government. And if my building happens to be in what’s called an “energy community,” a community that’s been affected by the transition from coal – I get an additional 10%. Now I’m looking at $500,000 of a tax credit back from a $1 million investment. 

People are beginning to wake up and realize the power of that. If I happen to be the minister of a church and I want to put a $1 million solar array on excess land I have behind my church, I also can get the benefit of that tax credit. Every synagogue, every school, every mosque, every governmental agency that we fund, all of us are eligible for direct pay. That’s the brilliance of this piece of legislation and why we think it's so transformative, not just for Pennsylvania, but for the whole nation. If you put your competitive dollars to help make the energy transition happen, you get the direct benefit of that investment. It's the best business-led tax investment strategy ever devised for clean energy. 

Now we have to do as much as we can to communicate the value of that … We have a team of people who are stood up in the governor’s budget office that are responsible for working with every municipality in the commonwealth to begin maximizing this opportunity. This isn't like a solicitation to write for a grant that you go after. This is something where you have to have the right team of people to help you understand the value of the opportunity, do the plan and execute the plan. This is where the feds need to work with us more. People don’t know about these tax credits … If we don’t get the word out, and we don’t do a more effective job of reaching people about this, then we’re all going to lose the opportunity because these tax credits only run through 2032.

How can the commonwealth balance its history as an energy producer and its available resources while focusing on the energy transformation and ensuring no one is left behind? 

Let’s think about the categories of energy that we can lean into. We are already strong in hydrocarbons and we’re very proud of our capacity, especially in the industries that will help counter the geopolitical instability we have in the world right now. We’re going to lean into the fact that we are an all-the-above energy state, but at the same time, we have to think about how much our oil and gas community members know and understand from what they’ve learned. With advances in geothermal energy, we can dig deep enough that the rock is so hot we can turn turbines now, create steam and actually generate power. There are companies out west that are doing this right now that are essentially taking the revolution of fracking, going through really hot rock and creating opportunities to generate baseload energy from geothermal power. 

You can imagine in the commonwealth all the resources we have and all the people who know how to do drilling and how to do it safely … All of that, when you bring it together, is an extraordinary opportunity for us to leverage what we already do well. We already know how to deploy these technologies; now we can deploy them in the service of baseload renewable electricity, which is going to be key to decarbonization – the same thing can be said for carbon sequestration. All of the pore spaces that are now being essentially vacated with natural gas become an opportunity to consider where carbon can be sequestered and how we can produce zero-carbon electricity using a variety or blend of resources.

Are you hearing concerns that hydrogen hubs, geothermal, natural gas and other types of energy may not be considered “green”?

The Philadelphia hydrogen hub is a technology proposal that focuses on what they will call “pink and green,” which is nuclear, solar and wind-related technologies. The Western Pennsylvania hydrogen hub is still based on the idea that the natural gas community, coming together with environmental advocates and working on carbon sequestration and other safety measures, can find ways to safely produce hydrogen at a price point that makes sense for the market. And the goal in all things is to maximize every piece of the energy complex that we can so that we can establish a hydrogen economy.

When you think about the next five, six or seven years, we want to take the gas-fired power plants that are working on our grid right now and begin to blend hydrogen so that those same turbines can continue to generate reliable electricity for us and reduce emission profiles at the same time. Ultimately, there may be some who say we need to eliminate hydrocarbons immediately and we need to eliminate natural gas. We don't believe that's reasonable because in doing so, we would lose a substantial component of the grid that already exists. And frankly, when we start looking at the technologies that we're going to need to invest in over the next 10, 15, 20 and 25 years, there’s going to be moments of extreme need where we’re going to have to lean into hydrocarbons in order to make sure that that reliability is met in an extreme circumstance like a winter storm event where the reliability of the entire grid can be threatened. 

This is what Gov. Josh Shapiro has been articulating as the fundamental core of his energy policy – we can’t walk away from any piece of what we do today and believe that we will be successful. We can only build from what we have. And ultimately, over time, that’s going to mean a variety of investments. I respect those who might disagree with that, but if you’re not willing to invest in the full energy complex in order to make the energy transition happen, we’re going to create risks and we’re going to create potential damages that far outweigh the concerns that some may have with the near-term effects of our current energy complex.