The state Senate Environmental Resources and Energy Committee recently voted to send a letter to the Independent Regulatory Review Commission urging it to thoroughly review concerns about the Regional Greenhouse Gas Initiative (RGGI).
RGGI is a compact between several Northeast and Mid-Atlantic states that agree, either through legislative or regulatory action, to implement a carbon tax on electricity production and require fossil fuel plants to purchase allowances.
The state would enter the RGGI if the Environmental Quality Board approves it.
The Feb. 3 letter, led by committee chairman Sen. Gene Yaw (R-23), expresses concerns about the proposed regulation from elected officials, business leaders, organized labor leaders, and others.
“RGGI will lead to tremendous economic disruption – including the loss of thousands of blue-collar jobs, major impacts to the property tax bases in host plant communities and dramatic increases in electric rates for residential, commercial and industrial customers,” the lawmakers wrote. “Low income households, already suffering from energy poverty, will be hit the hardest as residential consumers pay significantly more for delivered electricity.”
Concerns expressed in the letter included that only the General Assembly, not the Department of Environmental Protection, has the power to decide whether the state should enter into the RGGI.
Additionally, the power of taxation also lies with the General Assembly, and the RGGI is a carbon tax. RGGI allowances are expected to raise $2.4 billion over nine years, according to the Environmental Quality Board. The board intends to use only 6 percent of the regulatory fee intended for administrative costs related to a regulatory scheme.
The board’s hearings violated the Air Pollution Control Act because it held five virtual meetings. The act states meetings must be held in every region of the state affected by the proposed regulation. Virtual meetings exclude those in rural areas that do not have internet access, according to the letter.
Modeling data for RGGI was conducted in April. Since then, the RGGI allowance price has increased 32 percent. Coal and older natural gas plants will suffer a competitive disadvantage.
Notably, the state’s carbon dioxide emissions have fallen 38 percent since 2008 without participating in any programs like RGGI, the Senate committee members wrote.
Imposing the RGGI will cause detrimental economic effects, the letter said. All coal plants would close during the first year. Natural gas plants would either close or reduce production. Thousands of jobs would be lost. And residential customers would see electricity prices increase 7.8 percent, according to the lawmakers’ letter, citing data from the Penn State Center for Energy Law and Policy.
Additionally, President Joe Biden’s administration is actively pursuing climate policy, making any state policies unnecessary. Pennsylvania implementing the RGGI proposal would effectively subsidize fossil fuel generation in neighboring, non-RGGI states, the letter said.