West Virginia Attorney General J.B. McCuskey
HARRISBURG, Pa. – A neighboring state has sued Pennsylvania over laws passed in the last decade that prevent energy companies located outside of the Commonwealth from selling renewable-energy credits to those inside it.
West Virginia Attorney General J.B. McCuskey filed suit last week in federal court over Act 40 of 2017 and Act 114 of 2020, laws that essentially created a wall around Pennsylvania’s energy market.
Act 40 requires electric utilities to buy solar energy credits from Pennsylvania solar power systems, while Act 114 did the same for alternative-energy credits stemming from waste coal, hydroelectric power and other sources. These laws have raised prices for Pennsylvania consumers dramatically, McCuskey says, while harming out-of-state companies shut out of the Pennsylvania market.
“The acts serve no legitimate environmental purpose, nor do they advance the welfare of Pennsylvania’s citizens,” the suit says, noting electricity compliance costs in Pennsylvania have risen from $122.5 million in 2020 to more than $700 million in 2025.
“Instead, the acts were passed for one purpose: to protect in-state generators from out-of-state competition.”
The two states are connected by the PJM Interconnection, which historically allowed West Virginia energy producers to sell alternative-energy credits to Pennsylvania suppliers. About 40% of Pennsylvania’s Tier II AECs came from-out-of-state generators, McCuskey says, but that amount is now zero.
“In 2025 alone, West Virginia generators lost the opportunity to obtain more than $25 million in credit revenues that would otherwise have flowed to the State’s producers and, in turn, to its ratepayers and treasury,” the lawsuit says.
Pennsylvania lawmakers and the Public Utility Commission proudly declared they were closing the borders when the measures passed, but a nonprofit policy research firm earlier this year blamed those laws for more than $3.3 billion in costs for complying with green energy mandates.
The Alternative Energy Portfolio Standards Act has failed “to increase renewable generation or drive down emissions,” the Commonwealth Foundation says. A federal judge will now have to decide whether these laws are constitutional, as McCuskey is mounting an argument under the Commerce Clause.
Calling the acts “naked economic warfare between states,” McCuskey seeks to restore an interstate energy market created by federal policy. Companies like Appalachian Power, Mon Power and Potomac Edison hold energy credits on behalf of ratepayers but are blocked from selling them to Pennsylvania suppliers, preventing them from establishing lower rates, he says.
“Act 40 is facially discriminatory,” the suit says. “It conditions eligibility for Pennsylvania Tier I solar renewable energy credits on in-state location, in-state service-territory connection, or direct connection to Pennsylvania electric systems.
“Even if Act 40 were not facially discriminatory, it violates the Commerce Clause because it was enacted and implemented for a discriminatory purpose and has a discriminatory practical effect.”
