The battle over Pennsylvania’s entrance into the Regional Greenhouse Gas Initiative (RGGI) entered a new era when a pair of state senators requested an independent audit of the modeling. Senators Gene Yaw (R-Williamsport) and John Yudichak ( I-Swoyersville) say the information is outdated and the Independent Fiscal Office (IFO) needs to get involved.
“The IFO’s impartial analysis has been regarded as among the most trustworthy perspectives in state government for more than a decade,” Yaw said in a statement. “The office’s projections will offer clarity on RGGI’s true economic impacts, given the Wolf administration’s repeated unwillingness to do so.”
RGGI is a carbon cap-and-trade program that includes the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia. It’s designed to cap and reduce CO2 emissions from the power sector by requiring limiting carbon allowances, thereby driving up costs.
Governor Tom Wolf (D) has been pushing for the state to enter RGGI since issuing an executive order in 2019. Wolf says it is needed to combat man-made climate change.
“Climate change is one of the most critical issues we face, and I have made it a priority to address ways to reduce greenhouse gas emissions,” Wolf said in September 2021 after the Independent Regulatory Review Commission voted 3-2 to approve a regulation paving the way for Pennsylvania to join RGGI. “By participating in RGGI, Pennsylvania is taking a historic, proactive, and progressive approach that will have significant positive environmental, public health, and economic impacts.”
Still, legislators, think tanks, and consumer groups are concerned that RGGI will result in higher energy prices and fewer jobs.
“RGGI is an expensive boondoggle that would destroy Pennsylvania jobs for no environmental benefit,” said Gordon Tomb of the Harrisburg-based Commonwealth Foundation in a statement. “A clear-eyed examination can only reinforce what we already know.”
For Yaw and Yudichak, this key RGGI issue is the math.
“When Governor Wolf signed the 2019 executive order that forced Pennsylvania into the regional carbon tax program, auction clearing prices – the amount energy producers pay to buy “credits” to offset their emissions – were $3.24 per short ton,” said Senators Yaw and Yudichak. “At that time, taxpayer-funded analysts insisted prices would stay under $4 through 2030.”
In a letter to the IFO, the senators wrote that the most recent auction clearing price set on December 1st exceeded $13 per short ton. That’s more than four times what the department estimated and 40 percent above the September 8 clearing price alone. The senators add that inflationary pressures show no sign of slowing down anytime soon, either, meaning prices will continue to climb.
“This de facto carbon tax will translate into electricity bills spiking by double digits, ballooning fuel costs and price increases on just about everything we use daily,” Yaw said. “Thousands of jobs will disappear. And zero carbon emissions will be removed from the atmosphere. Taxpayers deserve to know the true cost of Wolf administration’s out-of-touch policies.”
Even Democratic gubernatorial candidate and Attorney General Josh Shapiro expressed concerns last year about Pennsylvania’s participation in RGGI.
“We need to take real action to address climate change, protect and create energy jobs and ensure Pennsylvania has reliable, affordable, and clean power for the long term,” Shapiro said in a statement in October 2021. “As governor, I will implement an energy strategy which passes that test, and it’s not clear to me that RGGI does.”
Shapiro was still not willing in February 2022 to take a stance on whether Pennsylvania should be part of the cap-and-trade plan.
“Ultimately, that is a determination I will make as governor, in close consultation with workers and affected communities,” Shapiro told DVJournal. “I refuse to accept the false choice between protecting jobs or protecting our planet – we must do both, and my priority will be ensuring Pennsylvania has a comprehensive climate and energy policy that will move all of us forward.”
Senators Yaw and Yudichak requested the IFO review after the Department of Environmental Protection refused an invitation to testify before the before the Senate Environmental Resources and Energy Committee about skyrocketing RGGI costs not contemplated by prior modeling.
Yaw is chairman of the Senate Environmental Resources and Energy Committee.
Yudichak, as chairman of the Senate Community, Economic and Recreational Development Committee, is planning to host a joint hearing with Yaw’s ERE Committee next month to discuss the IFO’s findings.
“Pennsylvania taxpayers, consumers and businesses deserve honest, accurate information about the proposed RGGI program and how it will impact their everyday lives,” said Yudichak. “The plan is expected to substantially increase utility bills for every small business and homeowner in Pennsylvania.”
“The Department of Environmental Protection’s modeling on the benefits and costs of RGGI have been consistently challenged,” said Tomb. “It is clear bureaucrats grossly underestimated the costs to consumers, (so) an honest review of DEP’s assumptions could go a long way in protecting Pennsylvanians and holding bureaucrats accountable.”