The great energy debate is just around the corner in New Jersey and New York and is already under way in Pennsylvania.

In Pennsylvania, the state legislature this week is holding a special session to deal with Governor Ed Rendell’s proposed $850 million Energy Independence Fund.

Rendell’s proposal would use $500 million of the proposed bond money to invest in clean-energy projects such as biofuel plants, solar and advanced coal technologies. $100 million would be made available to help Pennsylvania firms interested in expanding clean-energy production to attract private-sector investors.

Other money from the fund would reimburse homeowners and small businesses for up to half the cost of installing solar panels, pay for $100 rebates on residential purchases of energy-efficient air conditioners and refrigerators, and allow homeowners to install ‘smart meters’ -high-tech devices that help consumers target electricity use to times when the cost is lowest.

The governor failed to get his plan through the legislature in February and Republicans continue to raise questions about the size of the bond fund, just who will receive the incentive grants, and how the bond fund would be repaid. Rendell proposes to pay back the money over 30 years with a surcharge on consumer electric bills.

In the opening day of the special session on Monday, 15 new bills were introduced addressing various aspects of alternative energy investment and conservation. Yesterday’s issue of EnviroPolitics carried a description of the bills and links to full copies of the legislation. (For a 30-day free trial subscription, click here)

In New Jersey, the Department of Environmental Protection (DEP) and the Board of Public Utilities (BPU) are working on plans to help the state reach its ambitious goal of reducing greenhouse gases by 20% below 2006 levels (by 2020) and 80% below 2006 levels (by 2050). This would be accomplished by substituting clean energy (primarily wind and solar) for energy produced through the burning of fossil fuels.

In advance of the delivery of the governor’s plan to the Legislature sometime this Fall, the BPU in April adopted new regulations requiring 20 percent of New Jersey’s electricity to come from renewable sources by 2020. The new regulations also include a 2% solar set aside which is forecast to require 1500 MW. The governor’s office calls this “the nation’s largest solar commitment relative to population and electricity consumption.”

In New York, where Gov. Eliot Spitzer has called for reducing the state’s electricity consumption 15 percent below forecast levels by 2015, a report issued by the state’s Renewable Energy Task Force says New York is falling behind other states in developing renewable energy technologies.

One major obstacle, according to the report, comes from the complex and numerous local governments that have varying laws and restrictions that apply to installing new energy systems. New York also faces a competitive disadvantage, the report found, because other states provide substantially more funding for incentives to attract clean industries. For more on the report, check out this Business Week story.