RGGI implementation delayed under expected House action as the cost of membership soars

The House on Wednesday is almost certain to approve a concurrent resolution that will at least delay Pennsylvania’s joining a compact of states, the Regional Greenhouse Gas Initiative (RGGI), where membership is coming with the specter of ever higher costs for the power generation industry, and consumers, and businesses statewide

Fossil fuel power producers in the 11 Northeast and Mid-Atlantic states that make up RGGI pay a tax on carbon emissions imposed through a quarterly auction as part of a cap-and-trade program; the cost has jumped an eye-popping 150 percent since October 2019, when Gov. Tom Wolf signed an executive order committing the state to the program.

Nearly a third of that increase came in the last quarter.

The skyrocketing cost of membership to RGGI is yet another reason for Pennsylvania to forgo joining what is essentially a regional cartel, undermining the power generators, eliminating thousands of electricity industry jobs, all for the sake of wildly inflated environmental benefits. As a regional leader in power generation, Pennsylvania will be particularly hard hit by the tax.

“There is absolutely no upside for Pennsylvania to enter RGGI,” said PMA President & CEO David N. Taylor. “Any benefit to the environmental will be nearly undetectable, and thousands of Pennsylvania workers will be needlessly thrown out of family-sustaining jobs. We urge lawmakers to stop this insane Wolf initiative.”

The resolution (SCRRR1) before the House, now in its final scheduled session week before the end of the calendar year, disapproves the Wolf Administration’s rule requiring the Commonwealth to join the compact. A Wolf veto gives the General Assembly until February to muster enough votes for an override.  Even without an override, a near certain court challenge could delay the start of implementation even further, perhaps until a new governor takes office next January -- one industry and labor leaders hope will announce plans to remove the state from the compact, as has Virginia Governor-elect Glenn Youngkin, a Republican.

The key legal argument in a court challenge would be that the Pennsylvania Constitution gives only the General Assembly the authority to establish a new tax. And a new tax it is, not a “fee” as RGGI enthusiasts claim, since the revenue generated would far exceed the administrative costs involved in implementing the program. The General Assembly would have almost certainly simply ignored Wolf’s request for the tax, so he pushed the program through all the regulatory hurdles with no legislative input, and against the advice of three of his own advisory boards. 

The stated environmental benefits according to the Wolf administration’s own modeling, as noted by PowerPA Jobs Alliance, is a meager 0.17 percent reduction of CO2 emissions by 2030 in the entire Eastern Interconnection Region, an area that reaches from central Canada to Florida and over to the Great Plains.

Any gains, moreover, would almost be entirely offset by increases in emissions from other states, notably West Virginia and Ohio, who will step in to take up the slack in generation, according to a study by the Penn State Center for Energy Law and Policy. Ohio and West Virginia will be happy to step in and take our jobs too, thousands of high paying union and downstream jobs. 

“Since his RGGI participation executive order in late 2019,” Tom Melcher, Business Manager for the Pittsburgh Regional Building Trades Council wrote to lawmakers in March, “we have attempted to convey to the Governor our deepest concerns about the RGGI tax impacts on Pennsylvania’s fossil fuel electric power plants constructed, operated, and serviced by our members, and the businesses and workers that support the electric generation industry in our Commonwealth. Our pleas have gone unanswered and, despite the many, largely unresolvable objections from the Independent Regulatory Review Commission, the Governor continues to press forward as if other opinions are a mere distraction.”

Business and labor leaders were hopeful that Attorney General Josh Shapiro would block the regulation when it came before his office for a required legal review.

RGGI implementation delayed under expected House action as the cost of membership soars

The House on Wednesday is almost certain to approve a concurrent resolution that will at least delay Pennsylvania’s joining a compact of states, the Regional Greenhouse Gas Initiative (RGGI), where membership is coming with the specter of ever higher costs for the power generation industry, and consumers, and businesses statewide

Fossil fuel power producers in the 11 Northeast and Mid-Atlantic states that make up RGGI pay a tax on carbon emissions imposed through a quarterly auction as part of a cap-and-trade program; the cost has jumped an eye-popping 150 percent since October 2019, when Gov. Tom Wolf signed an executive order committing the state to the program.

Nearly a third of that increase came in the last quarter.

The skyrocketing cost of membership to RGGI is yet another reason for Pennsylvania to forgo joining what is essentially a regional cartel, undermining the power generators, eliminating thousands of electricity industry jobs, all for the sake of wildly inflated environmental benefits. As a regional leader in power generation, Pennsylvania will be particularly hard hit by the tax.

“There is absolutely no upside for Pennsylvania to enter RGGI,” said PMA President & CEO David N. Taylor. “Any benefit to the environmental will be nearly undetectable, and thousands of Pennsylvania workers will be needlessly thrown out of family-sustaining jobs. We urge lawmakers to stop this insane Wolf initiative.”

The resolution (SCRRR1) before the House, now in its final scheduled session week before the end of the calendar year, disapproves the Wolf Administration’s rule requiring the Commonwealth to join the compact. A Wolf veto gives the General Assembly until February to muster enough votes for an override.  Even without an override, a near certain court challenge could delay the start of implementation even further, perhaps until a new governor takes office next January -- one industry and labor leaders hope will announce plans to remove the state from the compact, as has Virginia Governor-elect Glenn Youngkin, a Republican.

The key legal argument in a court challenge would be that the Pennsylvania Constitution gives only the General Assembly the authority to establish a new tax. And a new tax it is, not a “fee” as RGGI enthusiasts claim, since the revenue generated would far exceed the administrative costs involved in implementing the program. The General Assembly would have almost certainly simply ignored Wolf’s request for the tax, so he pushed the program through all the regulatory hurdles with no legislative input, and against the advice of three of his own advisory boards. 

The stated environmental benefits according to the Wolf administration’s own modeling, as noted by PowerPA Jobs Alliance, is a meager 0.17 percent reduction of CO2 emissions by 2030 in the entire Eastern Interconnection Region, an area that reaches from central Canada to Florida and over to the Great Plains.

Any gains, moreover, would almost be entirely offset by increases in emissions from other states, notably West Virginia and Ohio, who will step in to take up the slack in generation, according to a study by the Penn State Center for Energy Law and Policy. Ohio and West Virginia will be happy to step in and take our jobs too, thousands of high paying union and downstream jobs. 

“Since his RGGI participation executive order in late 2019,” Tom Melcher, Business Manager for the Pittsburgh Regional Building Trades Council wrote to lawmakers in March, “we have attempted to convey to the Governor our deepest concerns about the RGGI tax impacts on Pennsylvania’s fossil fuel electric power plants constructed, operated, and serviced by our members, and the businesses and workers that support the electric generation industry in our Commonwealth. Our pleas have gone unanswered and, despite the many, largely unresolvable objections from the Independent Regulatory Review Commission, the Governor continues to press forward as if other opinions are a mere distraction.”

Business and labor leaders were hopeful that Attorney General Josh Shapiro would block the regulation when it came before his office for a required legal review. On December 10, Shapiro, Democratic candidate for governor, had expressed reservations about the regulation no doubt in hopes of reassuring pro-union voters. But his office went ahead and authorized the language anyway.

The environmental benefits from RGGI look especially feeble in comparison to the benefits realized by the energy marketplace.

Toby Rice, CEO of Pennsylvania-based EQT Corp, the largest natural gas producer the country, estimates that switching from coal to gas power in the U.S. has reduced CO2 emissions by the equivalent of electrifying 190 million cars, or roughly 70% of the total number of cars in the U.S.

“The United States has a vast amount of natural gas, more than any other country in the world,” Rice wrote in a letter to Senator Elizabeth Warren (D-MA), who tried to shift blame for rising energy costs on producers. “To best address climate change, it is incumbent on countries like the United States to produce more natural gas that can be used by other countries. If the U.S. doesn’t, Vladimir Putin has made clear that Russia will, increasing his energy leverage over Europe.”

But with the Wolf Administration set on entering RGGI, not a single natural gas fired power plant has been proposed in Pennsylvania since the policy was first proposed. Meanwhile, natural gas plants are being built along our border in West Virginia and Ohio where they stand ready to sell more expensive energy to Pennsylvanians should the Wolf Administration prove successful.

CLICK HERE to send a letter to your lawmakers and urge them to approve Senate Concurrent Regulatory Review Resolution No. 1 - Disapproval of Regional Greenhouse Gas Initiative (RGGI) Regulation. 



Issue/Catgory: