June 12, 2023
House Republican Policy Committee
David N. Taylor
President & CEO
Thank you, Chairman Kail and members of the committee.
I’m David N. Taylor, President & CEO of the Pennsylvania Manufacturers’ Association, the statewide trade group representing the people who make things here in the commonwealth.
In every way that matters, energy is life. Our manufacturing sector, which employs a half-million Pennsylvanians and creates $100 Billion in value every year, depends on abundant, reliable, affordable energy. Maximizing domestic energy production should be a top priority for all of Pennsylvania’s leaders and decision-makers.
Pennsylvania is the number one exporter of electricity in America. We power the grid. If the RGGI scheme is not thwarted, the new electricity tax will force the immediate closure of our remaining coal-fired electricity plants and older natural gas-fired plants. These facilities represent billions of dollars of critical infrastructure and a significant portion of our generation capacity. If the furnaces at those plants are allowed to cool, they will then warp, crack, and shatter; destroying these assets while placing significant strains on our already fragile power grid.
The RGGI electricity tax is exactly the wrong approach to take, 180 degrees wrong. Pennsylvania’s coal-fired electricity facilities not only contribute to our total output, but they also use a Pennsylvania resource that supports Pennsylvania mining jobs. The plants in question are in full compliance with DEP and EPA standards. There’s nothing wrong with them.
The United States is the world’s largest economy and is the second largest emitter of carbon dioxide at 13 percent and dropping. China is the world’s second largest economy and is the largest emitter of carbon dioxide at 30 percent and rising. China is expanding its consumption of coal for electricity generation, bringing many new coal-fired power plants online, negating all other global reductions in carbon emissions. Snuffing out our much-cleaner coal-fired electricity plants is foolhardy in the extreme.
The RGGI plan only makes sense if its goal is to stifle U.S. energy production, cripple American industry, kill off U.S. jobs, and bleed U.S. consumers with higher costs for food, fuel, and utilities.
PJM Interconnection has voiced concerns about the integrity of the electric grid if existing plants are retired. In a letter written in February, PJM’s Board of Managers said, “We believe the healthy reserve margins we enjoy now cannot be taken for granted into the future. Energy policies and market forces have, and could further expedite, the retirement of existing generation resources faster than the new resources are able to come online.”
Pennsylvania only barely escaped blackouts during the winter storm in December. We are on a collision course with reality if we don’t defend our plants TODAY by rejecting the unconstitutional RGGI tax. Homer City Generation Station is now scheduled to close in July, thanks to the new burden of the RGGI tax.
Pennsylvania’s diverse energy portfolio provides the baseload capacity to power our industries. Glass is made with natural gas-fired ovens that reach 3,100 degrees. To make steel, metallurgical coal is turned to coke to derive metallic iron from iron ore. Our life sciences industries use natural gas to power their chemical reactions and natural gas liquids throughout their processes. Our reemerging plastics industry is driven by the synergy between natural gas liquids as feedstock and natural gas as fuel. The RGGI tax will drive energy intensive manufacturers out of Pennsylvania, and our fear is that this could drive these industries overseas; further disrupting our already fragile supply chains and distribution networks. Through several recent crises, we should have already learned how vitally important these supply chains are to our national security.
Because Pennsylvania is a major producer of American energy, decisions in Harrisburg have national and global implications. Anything that diminishes Pennsylvania energy production weakens America.
There should be no further delay for Pennsylvania to reject RGGI, and we respectfully request Governor Shapiro to withdraw our commonwealth immediately.