Members of the Pennsylvania Senate Environmental Resources and Energy Committee voted last week to approve sending another letter to regulators protesting the state’s entrance into the Regional Greenhouse Gas Initiative (RGGI).

In a 7-4 vote, the committee voiced its disapproval to the Independent Regulatory Review Commission (IRRC) of Reg. 7-559, which would establish a carbon dioxide budget trading program and pave the way for Pennsylvania to enter RGGI. The letter also announced that the committee intends to exercise its authority to extend its review of the final rulemaking for 14 days if the IRRC approves the regulation.

The committee issued a similar letter to the IRRC in February, explaining its “serious legal and policy concerns” regarding decisions by the Environmental Quality Board (EQB), the state agency tasked with crafting and evaluating the RGGI regulations.

The EQB voted 15-4 in July to back the final RGGI rules, sending them to the IRRC and state Attorney General Josh Shapiro for final review. (See PA Backs Final Rule for RGGI Entrance.) The IRRC will review the letters during its Sept. 1 meeting, and the Pennsylvania Department of Environmental Protection (DEP) expects the state to join RGGI in 2022.

Committee Chair Gene Yaw (R) said he agrees climate change is happening, but he disagrees humans are its primary driver. Yaw also denounced the promotion of clean energy production over existing coal and natural gas energy production in the state, saying green energy projects would not exist without the use of fossil fuels and mining for raw materials.

Republicans in the legislature have consistently criticized Gov. Tom Wolf (D) over his executive order in October 2019 directing state officials to develop a rulemaking for joining RGGI, arguing that the legislature is the only governmental body that can endorse such interstate compacts. (See GOP Continues Opposition to Pa. RGGI Plans.)

Yaw said Pennsylvania “loses total control” over its own energy policies and environmental concerns by joining RGGI, as carbon allowances are collectively approved by the program’s states.

“In effect Pennsylvania’s saying, ‘OK, we’re going to put our electric prices up to a popular vote. And what we have to do with our environmental concerns, you determine,’” Yaw said. “There’s nothing clearer that should go before the legislature than issues like that.”

Letter

In the letter approved last week, senators continued to argue that there is no statutory basis for the RGGI regulation and that the EQB failed to comply with the state’s Regulatory Review Act.

Republicans and other RGGI opponents have asserted that the Pennsylvania Air Pollution Control Act requires the DEP to submit regional air pollution programs to the legislature because they are a tax requiring legislation and cannot be instituted by an executive order.

The Wolf administration has argued that because RGGI auction proceeds would be used for initiatives to reduce CO2 emissions, the proceeds would be considered the administrative costs of implementing the state’s air pollution control program and not a tax. (See Pa. Releases Rulemaking to Join RGGI.)

“Suffice to say, DEP’s reliance upon section 5(a) of the Air Pollution Control Act, which was enacted in 1972, requires a monumental and unprecedented stretch of the concept of legislative intent to conclude that the 1972-73 General Assembly intended to provide DEP with the power to restructure Pennsylvania’s electricity generation through a rulemaking process,” the letter said.

Senators said information they received from PJM indicated that the RGGI regulations will “trigger double-digit consumer electricity rate increases” for customers in Pennsylvania, going as high as 18% for low- and fixed-income households. They point out that the current electricity prices for several RGGI states — Connecticut at 18.66 cents/kWh, Rhode Island at 18.49 cents, Massachusetts at 18.40 cents and New Hampshire at 17.15 cents — are the highest in the continental U.S., while Pennsylvania’s average electricity price is 9.81 cents/kWh.

“RGGI states have seen their electricity prices rise three times faster than Pennsylvania’s,” the letter said. “It would also render uncompetitive or significantly less competitive two-thirds of our state’s current electric generation capacity.”

The committee said the DEP disregarded the IRRC’s recommendation earlier this year to delay RGGI entrance by at least one year to allow for impacted industries and communities to engage. It said it received “countless comments” from organized labor, business and community leaders, and local government officials over fears RGGI will “trigger enormous economic disruptions” within Pennsylvania.

“We believe IRRC’s rejection will help pave the way for a more constructive dialogue between the governor’s office and the General Assembly to consider common-sense energy policy reforms that do not impair our economy and harm our constituents,” the committee said.

The Pennsylvania House Environmental Resources and Energy Committee endorsed a similar letter in July, saying the DEP and EQB “vastly overreached in their role as part of the executive branch of government” and are “making a serious policy decision here, which is the purview of the General Assembly.”

Senator Opinions

Sen. Carolyn Comitta (D), minority chair of the committee, asked what the committee wished to accomplish by sending another letter to the IRRC. She said a vote in favor of the letter was supporting “the past and the status quo” and the “continuation of carbon emissions impacting the environment.”

Coal generation in Pennsylvania is declining because of current market forces in favor of moving away from fossil fuels, Comitta said, not because of regulations coming from RGGI states. She said that without RGGI, there is no plan to help coal workers and communities transition to clean energy, pointing to current bills like SB15, the RGGI Investments Act, or the corresponding HB 1565 that calls for making “substantial investments” in communities impacted by the decline of fossil fuels.

“Joining RGGI at this point is a key step in stopping the worst impacts of climate change,” Comitta said. “Joining RGGI is a responsible, effective action we can take right now.”

Sen. Scott Martin (R) gave his support of the letter, citing the economic impacts of energy costs in RGGI states. Martin said he was surprised to learn that the four highest energy cost states and eight out of the top 10 are RGGI states.

Calling it “terribly frightening,” Martin said implementing RGGI by the executive branch of the government without the support of the legislature could have major implications for future legislation. He said the legislature has always been the entity to approve interstate compacts.

“The fact that these discussions aren’t going through the legislature, with over a half-billion dollars at stake, to me is very troubling, and the precedent that it’s sending is equally as troubling,” Martin said.

Sen. Joe Pittman (R) said voting on the letter was “not a waste of time” and that its content “represents thousands of families who rely on carbon-emitting electricity generation for their livelihoods.”

Pittman said there is no guarantee of RGGI revenues coming to Pennsylvania because the auctions are based on the number of generators emitting carbon and willing to pay for credits. Pittman said estimates for the amount of money Pennsylvania would receive from RGGI has fluctuated anywhere from $180 million to $500 million.

Pittman said February winter storm in Texas showed the importance of having a diverse generation mix. He also said Pennsylvania joining RGGI will shift power production to West Virginia and Ohio and negate any environmental benefits.

“It’s easy to talk about the impacts when you don’t live in the backyard of 6,000 MW of carbon-emitting electricity that happens to be keeping our lights on right now,” Pittman said.