Indiana County business leaders, labor representatives, school district superintendents, and elected officials warned about the devastating economic impacts that would result from Pennsylvania’s inclusion in the Northeast Regional Greenhouse Gas Initiative (RGGI) during a virtual news conference hosted by the Power PA Jobs Alliance on Thursday.
Specifically, RGGI would create a carbon tax on air emissions from coal and gas-fired power plants – some of the largest and most reliable sources of energy in Pennsylvania.
Gov. Tom Wolf signed an executive order in October 2019 instructing the Pennsylvania Department of Environmental Protection (DEP) to join RGGI, a market-based collaboration among nine Northeast and Mid-Atlantic states to reduce greenhouse gas emissions and combat climate change. In recent weeks a number of members of the Pennsylvania General Assembly have sent letters to the governor urging him to suspend the regulatory efforts to join the RGGI.
“Pennsylvania now has the terrible distinction of having the highest unemployment rate in the nation. If Gov. Wolf insists on this executive order to push Pennsylvania into RGGI, he will hurt Indiana County even more,” Indiana County Commission Chairman R. Michael Keith said. “The world economy, and certainly Pennsylvania’s economy, has dramatically reshaped with the ongoing COVID-19. The last thing we need to burden our citizens with is an annual tax on carbon. A tax that will be paid by the electricity consumers and employers alike.”
Coal plants in Allegheny, Armstrong, Cambria and Indiana counties, considered “ground zero” for the RGGI program, will be at risk of closure because of the uneconomical carbon tax, according to the Power PA Jobs Alliance. The plant closures would lead to the direct elimination of family-sustaining jobs and increased electric costs for all the Commonwealth’s energy consumers.
Indiana County coal and coal refuse electric generators, in particular, produce $1.3 billion in total economic impact, supporting 1,225 jobs with $59 million in employee compensation annually, Keith said.
Power PA Job Alliance also stated that Pennsylvania has seen numerous environmental benefits with clean, reliable and affordable energy in a deregulated electricity market. Under Wolf’s Climate Action Plan, Pennsylvania’s carbon dioxide emissions from the electric power sector have decreased 33 percent since 2009. The alliance also argues that past studies show that carbon taxes do little to effect environmental change, but do impose a significant increase in consumer costs.
“You cannot build back up in a day, in a month, even in a year in this industry what is being torn down,” Indiana County Commissioner Robin Gorman said.
Gorman called attention to the impacts of the current health crisis and the similarities of devastation RGGI will cause for individuals relying on coal energy jobs in the region.
“Let’s let COVID-19 and the real experiences we are having right now burn into everyone’s memory. Answers like ‘You can go apply for unemployment’ as a response to the impact while you look for another job, or hope that you will find another job at equal value. Let’s remember how good that’s working for us and our citizens in our most desperate, critical time of need,” she said.
State Sen. Joe Pittman (R-41) said he believes Wolf should not move forward with any plan before visiting the county and clearly explaining how the $300 million carbon tax is good for them.
“To me this is about dialogue and transparency. And when the governor issued his executive order in October, he committed to an open and transparent process. And that hasn’t occurred,” Pittman said. “The governor needs to listen to our communities and understand that if you’re going to implement policies that pose a risk of destroying thousands of family-sustaining, union-wage jobs and destroying local school districts by having their property tax base completely decimated, you need to hear us and you need to present us with a plan.”
Pittman said he asked the DEP to consider the use of carbon capture sequestration technologies, but has yet to hear a response from the state on the matter.
“Let’s keep in mind that a carbon tax only generates revenue if we continue to emit carbon. So the entire concept of this to me is incongruent,” Pittman said. “If the objective of this is to reduce carbon emissions, then why on earth are we going to then implement a tax, prepare to spend that money in Lord knows what capacity, only to supposedly eliminate the source of the revenue.”
The senator also noted the fact that Pennsylvania, currently an exporter of electricity, is tied into the PJM, a regional transmission organization that coordinates the movement of electricity in all or parts of 13 states and the District of Columbia.
“While we export electricity today, if we choose to allow our power plants to be closed, we have then outsourced our electricity production to other states,” he said. “There are 18 coal-fired power plants with the PJM outside of Pennsylvania, all to the west of us. They will pick up the capacity and the load. They will continue to burn coal. They will continue to emit carbon and that will come at a price that our people will pay.”
Donald Arena, president of the South-Central Building Trades said the direct job and electric revenue losses are not the only impacts the region and state will see.
“In addition to the losses that we’re going to incur in man hours and job losses if RGGI does go through and these plants eventually close due to the fact that RGGI is enacted, you’ve got to think a little bit about the fact that members from our seven-county area and even other regions for outage and construction work are stopping for gas, they’re buying their food for lunches, or staying at campgrounds for larger projects. It’s not just about the building trades impact of loss of man hours and jobs. It’s about the economy in general. These plants attract that economy.”
Arena noted the recent build of a 1,050 megawatt combined cycle gas power plant in Cambria County, completed by the county’s building trades unions. The construction lasted for 30 months, involving 1.75 million of man hours.
“We know that eventually these coal-fired plants will retire but this conversation is scaring off investors who may later replace these plants with something like a combined cycle gas-fired power plant or a modular plant that has carbon capture added to it. The opportunities are vast if RGGI is not in place,” he said.
Mark Hilliard, president of the Indiana County Chamber of Commerce, added that the plant closures will cause mammoth ripple effects to the Commonwealth’s interconnected economy.
“Small businesses that support the electricity generation and coal-related industries throughout Pennsylvania will experience a significant setback to their businesses,” Hilliard said. “This policy is pure anti-business and will create a true competitive disadvantage for Pennsylvania as a whole.”
Those ripple effects will also extend to school districts, affecting property taxes, income taxes, home values, and school enrollment.
Curtis A. Whitesel, superintendent of the Homer-Center School District, added that decreased revenue in the county will also negatively impact education resources, leaving the school district to face an $800,000 annual budget shortfall, to cut programs, and to reduce opportunities for students.