DV Journal

The state Senate on Thursday voted 31-18 Thursday to repeal Pennsylvania’s membership in the Regional Greenhouse Gas Initiative (RGGI), which Senate Republicans call a tax on electricity for Keystone State ratepayers.

“It is time for Pennsylvania to take charge of its own energy future,” said Sen. Gene Yaw (R-Bradford), chair of the Environmental Resources and Energy Committee. “We must close this chapter and move forward with responsible policy that strengthens grid reliability, incentivizes development, creates jobs and protects consumers from higher costs.”

RGGI is a cooperative effort among 11 U.S. states to reduce greenhouse gas (GHG) emissions from the power sector. Launched in 2009, RGGI is the first mandatory market-based cap-and-trade program in the United States to address climate change.

RGGI requires fossil fuel power plants with capacity greater than 25 megawatts to obtain an allowance for each ton of carbon dioxide they emit annually. Power plants within the region may comply by purchasing allowances from quarterly auctions, other generators within the region, or offset projects. The costs of those allowances are passed on to ratepayers.

Rather than taking the RGGI proposal through the legislative process, then-Gov. Tom Wolf (D) forced Pennsylvania into the compact via executive order in 2019.

Seeking to nail its coffin shut, the Senate passed a bill repealing it for the second time. Entering the compact was a top priority for Wolf, who vetoed a bill that would have required the state’s legislature to approve entering the RGGI.

However, Pennsylvania’s status in RGGI remains tied up in the courts, with a case pending in the state Supreme Court.

RGGI would “increase electricity rates for consumers, cut energy and has placed a halt on expansion of numerous manufacturing jobs,” the state Senate GOP said in a statement. “No new investments in baseload generation have come to Pennsylvania in the six years since the Wolf Administration attempted to enter the state into RGGI.”

They noted that, if adopted, it must be by the legislature, not executive fiat, which is the crux of their court case. Shapiro had appealed a Commonwealth Court decision to the Supreme Court.

“For nearly six years, we have been taking actions to stop the RGGI Electricity Tax,” Senate Majority Leader Joe Pittman (R-Armstrong) said. “Even though the Commonwealth Court has ruled RGGI is unconstitutional, Gov. Shapiro has continued his push with the Supreme Court. If the RGGI electricity tax would go into effect, it would mean hundreds of millions of dollars of increases on electric bills, impacting every electricity consumer in this commonwealth. We must help families feeling the strain of inflation – not put more pressure on their household budgets.”

The Senate passed a bill to repeal RGGI last year. It died without being adopted by the Democrat-controlled House.

The bill will now goes to the House, which is currently tied 101-101 until a special election is held in March.

Shapiro recently put forward an energy proposal that he called the “Lightning Plan.”

It includes manufacturing tax credits, rebates for energy efficient appliances, a board to approve energy projects, a tax credit program, an investment credit, and regional hydrogen tax credits.

House Speaker Joanna McClinton did not respond to a request for comment, nor did Shapiro.

State Sen. Gene Yaw has filed legislation to repeal the Regional Greenhouse Gas Initiative (RGGI) carbon tax.

Former Gov. Tom Wolf (D) signed an executive order in 2019 to bring the state into RGGI, a move the state legislature previously rejected. According to Yaw, RGGI, a multi-state compact, would increase consumer electricity rates while cutting energy and manufacturing jobs and lead to the closure of Pennsylvania power plants.

In a memo circulated to Senate members, Yaw said Senate Bill 1058 would repeal a CO2 Budget Trading program regulation promulgated by the Department of Environmental Protection (DEP) and the Environmental Quality Board (EQB) despite bipartisan objection from the General Assembly.

“For four years, Pennsylvania taxpayers have footed the bill for this unconstitutional, unilateral decision,” said Yaw (R-Bradford). “RGGI is wrong for Pennsylvania, and it is time to repeal this regulation and focus on putting forth commonsense, environmentally responsible energy policy that recognizes and champions Pennsylvania as an energy producer.”

Last year, the Commonwealth Court ruled Pennsylvania’s entrance into RGGI may only be achieved through legislation duly enacted by the General Assembly, not merely through rulemaking promulgated by DEP and EQB. That ruling has been appealed to the Pennsylvania Supreme Court by Gov. Josh Shapiro (D), and the appeal remains pending. In the past, legislation preventing Pennsylvania from unconstitutionally being entered into RGGI has received bipartisan support.

Perhaps to appear moderate while campaigning for governor, Shapiro did not back RGGI and refused to call for an end to fracking. Now that he is in office, he is fighting in court to uphold his predecessor’s action. Shapiro justified his decision to appeal the Commonwealth Court RGGI ruling as a defense of executive authority.

But other states that are part of RGGI—Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia—joined with legislative approval rather than executive fiat.

According to the nonpartisan Independent Fiscal Office, RGGI could cost Pennsylvanians more than $663 million per year. The Department of Environmental Protection estimate put the number tens of millions of dollars higher, at $688 million.

Virginia, which Republican Gov. Glenn Younkin leads, is trying to leave RGGI. However, Democratic legislators oppose the withdrawal, and the Association of Energy Conservation Professionals has filed a lawsuit to block it.

Yaw said this legislation comes after a series of hearings with members of the Ohio General Assembly to discuss PJM and the reliability of the mid-Atlantic power grid it manages. PJM projects 20 percent of its existing capacity will retire between now and 2030. That would leave it without sufficient power to meet the demands of consumers.

Yaw added thermal generation retirements, like the recently announced Brandon Shores power plant closure in Maryland, coupled with the threat of RGGI, only further compromise the integrity of the electric grid. One Federal Energy Regulatory Commissioner (FERC) recently said the shutdown could cause a “potentially catastrophic” scenario. However, a recent FERC order shows concerns about the outlook of the region’s power production are being heard.

“Not only would RGGI leave thousands struggling to pay their utility bills during a time of record inflation, but it would also have a detrimental impact on the reliability of our region’s already strained electric grid,” Yaw said. “There is more work to be done, but this legislation is an important component to ensuring energy reliability, sustainability, and affordability for Pennsylvania families and businesses.”

The other RGGI member states are not energy-producing states. Pennsylvania has the highest production of natural gas after Texas. And fossil fuels here fund 424,000 jobs.

The threat of RGGI in Pennsylvania has driven fossil fuel plants out of existence, halted the construction of new natural gas power plants, and handcuffed businesses from making further investments with an uncertain regulatory future, according to Yaw. When this generation is retired by states with “clean energy goals,” the new generation cannot keep pace with the former plants.

The ongoing energy transition has had a detrimental impact on the reliability of Pennsylvania’s electric grid, making blackouts and restrictions on when and how residents and companies can use electricity inevitable, he noted.

Carl A. Marrara, executive director of the Pennsylvania Manufacturers’ Association, commended Yaw and the Senate for “tackling this important issue.”

“Senate Bill 1058 is necessary legislation to remove the unconstitutional mess, in the form of a $500 million energy tax, that the Wolf administration unilaterally imposed upon Pennsylvania’s ratepayers,” said Marrara. The Commonwealth Court’s decision last year clearly stated that RGGI is a tax and that, per the Constitution of Pennsylvania, taxation authority is granted solely to the legislature. Repealing RGGI will allow the General Assembly and Gov. Shaprio to debate and implement energy policies that make actual sense for our commonwealth.”

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Pennsylvania’s governor has gone to court to get the ball rolling again with the Regional Greenhouse Gas Initiative (RGGI), but a state legislator says it is nothing more than a legal stunt.

“This continues the Wolf administration’s pattern of reckless disregard for the constitution and the residents of this commonwealth,” said state Sen. Gene Yaw (R-Bradford) in a statement to Delaware Valley Journal.

Meanwhile, the Democrat who wants to replace Wolf in November, Attorney General Josh Shapiro, still is not willing 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.”

Wolf (D) has been seeking to put the state in RGGI since 2019 without the approval of the legislature. He has long stated that it is necessary to combat manmade 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,” he said.

Prior to the IRCC vote, the Environmental Quality Board voted 15-4 in favor of pushing Pennsylvania into the RGGI.

Still, the Legislative Reference Bureau has not yet published Wolf’s regulation, prompting the governor’s lawsuit last week in Commonwealth Court.

“Publishing the regulation in the Pennsylvania Bulletin would mean it takes immediate effect and would make Pennsylvania the first major fossil fuel state to adopt a carbon pricing policy,” says an AP story published last week on NBC Philadelphia.com. “Republicans who control the legislature oppose the regulation and argue they have more time, several weeks at least, to see if they can muster a two-thirds majority in each chamber to block it, (but) Wolf’s administration maintains that the legislative review period has expired and that Republicans’ interpretation of the law is wrong.”

“Once again, the administration relies on a flawed interpretation of state law to undermine the voice of elected officials – and the millions of Pennsylvanians who voted for us – to force this carbon tax into reality,” said Yaw. “Unfortunately, we’ve come to expect nothing less from this executive branch.”

RGGI may be Wolf’s last hurrah as governor. The 73-year-old is term-limited and will leave office in January 2023. Shapiro, the Democrats’ only major candidate for governor, has yet to reveal whether he would continue the push to impose the tax-and-trade system on Pennsylvania’s energy sector. As attorney general, Shapiro had signed off on Wolf’s decision to ignore the legislature.

“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 an October 2021 statement. “As governor, I will implement an energy strategy which passes that test, and it’s not clear to me that RGGI does.”

Pittsburgh public radio station WESA reports Shapiro made similar comments last year to officials from the boilermakers union.

“He told me he does not stand for RGGI the way it stands right now and he feels it should be run through the legislature,” said John Hughes, business manager of Boilermakers Local 154. “We should get everyone to the table and talk about it…. I said, ‘we are going to support the guy who doesn’t support RGGI,’ and he told me, ‘I can’t support it as is.'”

Yaw and other legislative opponents say RGGI will increase energy costs, and they dispute claims it provides meaningful environmental benefits.

“I, along with 161 other elected officials in the General Assembly, oppose RGGI because of the devastating impact it will have on our economy, our environment, and our residents,” said Yaw. “We will lose our position as a leading energy exporter when power generation moves to other less-regulated states.”

As a result, Yaw said carbon pollution “will only worsen.”

“No lawsuit will change how deeply flawed and unpopular this carbon tax is for Pennsylvania.”

Virginia’s newly-elected GOP governor, Glenn Youngkin, has announced he is pulling his state out of the initiative. New Jersey dropped out of RGGI under Republican Gov. Chris Christie in 2011, then re-entered under Democrat Gov. Phil Murphy in 2019.

Pittsburgh Works Together, an alliance of labor, business, and civic leaders, is also opposed to RGGI.

“It will lead to significantly higher power prices in Pennsylvania, which will hurt the state’s efforts to rebuild a manufacturing base, and it will adversely affect low-and fixed-income households and seniors,” a statement from that group said.

How much might RGGI add to the cost of electricity? Environmentalists and others who support RGGI say participation in the initiative will slow the increase in the cost of electricity. Pittsburgh Works Together sees things differently.

“It’s about double in Connecticut. I want to say the kilowatt hour in Pennsylvania is about 9.80 [cents per] kilowatt hour. It’s literally double that in Connecticut,” Jeff Nobers, executive director of Pittsburgh Works Together, told KDKA in July 2021.

Power PA Jobs Alliance, a coalition of labor, management, and consumer stakeholders who oppose state proposals to impose carbon dioxide emission taxes on fossil fuel generation, manufacturing operations, and motor fuels, said electric bills will increase by more than $2.6 billion by 2030.

“Since Gov. Wolf announced RGGI in the Fall of 2019, the RGGI tax rate increased from $5.20 to $13.00 – $7.80…a 150 percent increase,” said the Alliance in a 2021 press release. “If not stopped by the Pennsylvania General Assembly or the courts, RGGI will lead to even more power plant closures and massive job losses, and much higher (20+ percent) electric rate increases on poor and senior households.”

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