Pennsylvania is considering spending some of its carbon credit proceeds on energy efficiency and renewable energy development, a state official told Infocast’s Mid-Atlantic Renewable Energy Summit last week.

The state Department of Environmental Protection (DEP) estimates that carbon credit auctions under the Regional Greenhouse Gas Initiative (RGGI) will yield annual revenues of between $179 million and $320 million through 2030 once Pennsylvania joins the 10-state compact. (Virginia will become the 11th state to join in January.)

Allen Landis, executive director of DEP’s Pennsylvania Energy Development Authority, said state officials intend to spend  RGGI auction funds on eliminating air pollution because they are relying on the state Air Pollution Control Act as the legal basis for joining the compact.

He said the state expects energy efficiency to be a “major piece” in the spending plans, adding that efficiency would provide “tremendous dividends” for grid reliability, energy rates and job creation.

Renewable energy development in the state is also likely to receive funding, Landis said, because increasing Pennsylvania’s renewable capacity is essential to meeting Gov. Tom Wolf’s goal of a 26% reduction in statewide greenhouse gas emissions by 2025 while ensuring its electricity sector stays competitive in the long term. (See Pennsylvania Joins US Climate Alliance.)

Wolf, a Democrat, has been battling with the Republican majority legislature over the state’s entrance into RGGI since he signed an executive order in 2019 directing DEP to draft a rulemaking for joining the compact. (See Pennsylvania Governor Signs RGGI Executive Order.)

In September, the General Assembly passed a bill barring the state from joining RGGI or taking any action to control carbon dioxide emissions without legislative approval, but Wolf vetoed it. (See Pa. House Passes Bill Limiting RGGI Entry.)

Landis said the “greenhouse gas abatement” piece of the proposed RGGI regulations include programs ranging from electric vehicle charging stations to curtailing leaking emissions at abandoned oil and gas wells.

“The first and most important thing for us right now is to put the process out there, get input, draft out the plan and let people weigh in on it and make sure their voice is heard so everyone can contribute as to how those funds are spent,” Landis said in response to a question from moderator Flora Cardoni, field director at PennEnvironment.

The state Environmental Quality Board is accepting comments until Jan. 14 on the proposed regulations, which were published last month. Comments may be submitted through the eComment system. The board also held a series of virtual public hearings on the regulations.

Protecting Communities

State Rep. Chris Rabb (D) told the conference that regulators and the legislature needs to have a “laser focus on the hot spots” of environmental damage in Pennsylvania and use RGGI funds to correct “egregious” negative impacts on the environment in vulnerable communities. There is not much precedent for doing the type of work laid out in RGGI, he said, which makes it difficult for politicians and regulators to find the right mix for the program to succeed.

Rabb said politicians focus too much effort on “symptom chasing,” especially when they deal with environmental issues: They’re willing to address the symptoms of problems but don’t have the courage to go to the heart of systemic issues that create the problems.

RGGI is not the “universal solution” for all the environmental problems in Pennsylvania, Rabb said, but its goals are a step in the right direction. He said it is important right now for regulators to make sure the direction of the program is “sound” while addressing the needs of communities that will be impacted by the new regulations.

The state has to look at creating opportunities for “regenerative effects” by creating new green jobs and entrepreneurial opportunities for fossil fuel industry workers whose livelihoods are at risk, he said.

“These are frontline communities that we have to take care of,” Rabb said during the Dec. 8 session, which also featured discussion on how the state can further its renewable policies by increasing the goals in the 2004 Alternative Energy Portfolio Standards law. “This is about how we can transition them into a new reality where there are business opportunities and other community-centered efforts that will help make us whole.”

Industry Perspective

Kathleen Robertson, director of strategic initiatives and environmental policy at Exelon, said she appreciated the idea of job training being included in possible uses for RGGI funds. She said she believes an argument can be made that job training can be linked to improving air quality by focusing on careers like oil and gas well abatement, weatherization of buildings and the installation of energy efficiency projects. Weatherization provides opportunities for local workers because the jobs cannot be outsourced to cheaper foreign labor, she said.

Community support will be important as some of the existing generation plants transition or close, Robertson said, pointing to the shuttering of Three Mile Island nuclear plant in central Pennsylvania in 2019. (See Exelon to Close Three Mile Island.) She said the closure of generation plants can be devastating to communities’ tax revenues and employment base.

“Given the amount of money RGGI can raise, I think one of the really good opportunity areas is transitioning both the workers and the communities into the clean energy economy and making sure everyone has a leg up in that,” Robertson said.

Legislative Action

Cardoni asked Rabb how likely Pennsylvania’s legislature is to approve RGGI given the Republican resistance. (See GOP Continues Opposition to Pa. RGGI Plans.)

Rabb said Republican legislators will fight RGGI “tooth and nail” because they don’t want to lose fossil fuel jobs or the industry’s campaign contributions. The lack of limits on campaign donations in Pennsylvania makes it even more difficult to get controversial legislation passed, he said.

The oil and gas industry in Pennsylvania has more lobbyists than there are state legislators, Rabb said, which is an enormous number considering the state has the largest full-time legislative body in the country, with 253 members in the General Assembly. Rabb said the money in campaigns goes beyond partisan politics and is a problem of both Republicans and Democrats.

“The largest industries with the deepest pockets win,” Rabb said. “They win in a very cynical way. They win by influencing incumbents and candidates by cutting very big checks.”