The Pennsylvania Environmental Quality Board (EQB) on July 13 voted 15-4 to adopt a final rulemaking for the state to take part in the Regional Greenhouse Gas Initiative (RGGI), disappointing many lawmakers, as well as numerous state business and organized labor organizations.
“I am not surprised, but extremely disappointed that this massive regulation continues to move forward,” said State Sen. Joe Pittman (R-41). “The EQB ruling completely ignores the many serious concerns expressed by affected communities across the Commonwealth, in particular the ones that rely on the carbon-emitting generation of electricity and the various industries that support it for their economic well-being.”
The final rulemaking aims to reduce CO2 emissions from sources within the Commonwealth and establish the state’s participation in the RGGI, a regional CO2 Budget Trading Program to reduce emissions of CO2, a greenhouse gas (GHG) and major contributor to climate change. Eleven other states in the Northeast and Mid-Atlantic regions now participate in the RGGI, which is supported by Democratic Gov. Tom Wolf and aligns with his climate goals to reduce state GHGs 26 percent by 2025 and 80 percent by 2050, compared to 2005 levels.
“This is a milestone in helping Pennsylvanians get one step closer to combating the ills of climate change,” said state Department of Environmental Protection (DEP) Secretary Patrick McDonnell after the board’s vote.
In October 2019, Wolf signed an executive order directing the DEP to draft a regulation to join RGGI. The DEP issued that draft rule early last year and then collected more than 14,000 public comments, which were used to help develop its final rulemaking for the EQB’s vote on Tuesday.
Categorized as a “cap and invest” program that also permits trading of CO2 allowances to effect cost efficient compliance with the regulatory limit, RGGI provides a two-prong approach to reducing CO2 emissions from fossil fuel-fired electric generating units (EGU) located in the state: declining CO2 emissions budget and investment of the proceeds resulting from the auction of CO2 allowances to further reduce CO2 emissions. Each participating state establishes its own annual CO2 emissions budget which sets the total amount of CO2 emitted from fossil fuel-fired EGUs in a year, explained Hayley Book, DEP’s senior advisor on energy and climate, who presented the final rulemaking and recommendation for its approval to the board.
“This is the cornerstone of the Commonwealth’s climate change program at this juncture,” Book said, noting that Pennsylvania has the fifth-leading CO2 emitting electricity generation sector in the United States.
And while Book and her colleagues outlined the environmental, health and economic benefits of Pennsylvania’s participation in RGGI, opponents made their case against it.
Pennsylvania State Sen. Gene Yaw (R-23), chairman of the Senate Environmental Resources & Energy Committee, and House Environmental Resources and Energy Committee Majority Chairman Daryl Metcalfe (R-12), tried the hardest to sway the nay vote on the rulemaking, with Metcalfe making roughly five motions to either table or postpone action.
“The General Assembly [which is currently on recess] has a key role to play in this regulatory process,” Metcalfe said during one of his motions. “The EQB should table this rulemaking until September when the General Assembly is back in session to fully engage in this process.”
Sen. Yaw called the RGGI “a superficial step” for the state to take to address climate change because it targets just a small percentage of the overall CO2 emissions producers in the state, and Pennsylvania already has lowered emissions well thus far on its own, more so than any other state already participating in RGGI.
“I also don’t think it’s right to have other states dictating Pennsylvania policy,” Yaw said. “That’s really offensive.”
More opposition
Meanwhile, Sen. Pittman said the final rule also entirely dismissed various factors detailed by the Independent Regulatory Review Commission (IRRC), which in February suggested a one-year pause on the DEP’s final rulemaking to give businesses more time to adjust to the rising costs associated with joining RGGI.
“While this is seemingly a setback for working people, ratepayers, school districts, and municipalities, I am confident that there remain many chapters yet to be written on the future of the governor’s onerous and regressive carbon tax and whether it will actually become a reality in Pennsylvania,” Pittman added.
State Sen. Camera Bartolotta (R-46), chair of the Senate Labor and Industry Committee, said she is “outraged” by Gov. Wolf’s attack on affordable energy and jobs.
“I stand united with the numerous building trades and businesses which are opposed to the governor strong-arming Pennsylvania into a carbon tax plan,” said Bartolotta, who along with other opponents and Republicans in the General Assembly, noted that no other state that participates in RGGI has joined without approval of their respective legislature.
“Unfortunately, this is not the case for Pennsylvania,” she said. “Yet again, Governor Wolf and his administration decided to completely disregard the [Pennsylvania] Constitution.”
And by prohibiting access to the meeting for all but the members of the EQB, the board also failed to adhere to the Pennsylvania Sunshine Act, according to the Power PA Jobs Alliance, a coalition of organized labor and business leaders that opposes Pennsylvania joining RGGI without express legislative authorization.
While today’s EQB meeting was live streamed to the public, the alliance pointed out that the state law requires “[o]fficial action and deliberations by a quorum of the members of an agency shall take place at a meeting open to the public[.]” The Rachel Carson State Office Building where the meeting was held remains closed to the public.
The Power PA Jobs Alliance, which called RGGI “a job crushing regulation opposed by overwhelming and bipartisan majorities within the General Assembly and among Pennsylvania voters,” also said that the EQB violated transparency mandates under the Air Pollution Control Act that require public hearings to be held within regions impacted by the regulation.
“During this COVID-19 pandemic, government should be more transparent, not less,” the alliance said in a statement. “We believe DEP has fallen short on transparency in this matter by not responding to our questions about the proposed regulations, by failing to post the videos from the virtual hearings, by holding virtual-only public hearings and by failing to publish widespread public notice. The impact of these regulations is significant. The people of Pennsylvania rely on government to do its job properly, but DEP’s actions in this matter could undermine public faith in the agency.”
The Power PA Jobs Alliance also called the final rulemaking part of Gov. Wolf’s scheme to circumvent the General Assembly by unilaterally joining RGGI via regulation rather than legislation.
The alliance supports the enactment of legislation like Senate Bill 119 or House Bill 637, which it says affirm the General Assembly’s exclusive power to impose a tax, such as a carbon tax on fossil fuel generation plants estimated to generate hundreds of millions of dollars in revenue annually.
“And, failing a legislative solution to block Governor’s Wolf’s unconstitutional RGGI tax, we are confident that the Pennsylvania and/or federal courts will render the regulation null and void,” the alliance said.
Many opponents said RGGI is a massive tax on two-thirds of Pennsylvania’s current electric generation plants that will trigger the closure of all Pennsylvania coal-fired generation plants and other older natural gas plants, including many plants that recently committed to provide power through June 2023 through the recent PJM Inc. capacity auction.
And if forced to pay the RGGI tax, many of these plants will be forced to terminate operations and employees as early as the first year of RGGI, said the alliance.
In the meantime, plant owners in Ohio and West Virginia will continue to reap the benefits from the loss of competitive Pennsylvania electric generation, Yaw noted during the meeting.
“Pennsylvania will also be the only major energy producing state to join RGGI. There is good reason that broad, bipartisan opposition exists across the state to join RGGI as this move will have a devastating ripple effect on our economy,” Sen. Bartolotta said. “Today’s decision, pushed by the Wolf administration, means electricity price increases are likely on their way, as several regulatory boards have warned.”
Following Tuesday’s EQB meeting, the next step in the regulatory process is review by the IRRC.