Senate committee advances bill requiring legislative approval of RGGI involvement

The Senate Environmental Resources & Energy (ERE) Committee advanced legislation this week that would require legislative approval of Gov. Tom Wolf’s proposal to enter Pennsylvania into the Regional Greenhouse Gas Initiative (RGGI).

Senate Bill 119, introduced by Sen. Joe Pittman (R-41), creates the Pennsylvania Carbon Dioxide Cap and Trade Authorization Act, which prohibits the Department of Environmental Protection (DEP) from joining RGGI or any similar agreement without approval from the state Legislature.

“A carbon tax is a major energy and fiscal policy initiative, and if such a tax is to be imposed on Pennsylvania employers, we believe it should be approved by the General Assembly. Beyond the fiscal impact on Pennsylvania manufacturers, coal and gas electric generation, consumers, and future economic investments made in our state, it also creates serious constitutional questions of checks and balances between co-equal branches of government,” said Pittman, who serves as vice chairman of the ERE. “Senate Bill 119 restores that balance by requiring legislative approval before Pennsylvania imposes a carbon tax on employers operating in the Commonwealth.”

In October 2019, Wolf directed the DEP to join RGGI – a collaboration of 11 Northeast and Mid-Atlantic states – which sets a cap on total carbon dioxide (CO2) emissions from electric power generators in each member state. Power plants must purchase a credit or “allowance” for each ton of CO2 they emit in order to comply with RGGI standards.

If Pennsylvania joins RGGI, it would be the only major energy producing state in the initiative and the resulting carbon tax on employers engaged in electric generation would devastate the industry, according to a statement from the Senate Republican Caucus.

“Since Pennsylvania’s deregulation of electricity, 19 coal-fired electric generating units (EGUs) have or are in the process of closing or converting to natural gas. If Pennsylvania adopts a carbon tax by joining the RGGI, the remaining coal-fired EGUs would be forced to close instead of paying hundreds of millions in additional taxes,” Pittman wrote in a memo with bill co-sponsors ERE Chairman Gene Yaw (R-23) and Sen. David G. Argall (R-29).

Since Wolf’s edict, the RGGI proposal has been rejected by three DEP advisory boards. On Feb. 16, the Independent Regulatory Review Commission called for a one-year moratorium on its implementation. Additionally, Senate Republicans announced last week that they would halt consideration of Public Utility Commission nominees until Wolf withdraws his unilateral decision to join the RGGI compact without Legislative approval.

“These closures would lead to the direct elimination of thousands of family sustaining jobs across the Commonwealth and millions in local and state tax revenues,” the senators wrote. “The significant negative economic consequences would be compounded regionally as these coal-fired EGUs consume nearly one-fifth of Pennsylvania’s bituminous coal production, an employer base that provides nearly $7 billion in total economic output throughout Pennsylvania.”

Under Senate Bill 119, the DEP would be required to publish its RGGI legislation in the PA Bulletin and provide a public comment period of at least 180 days, during which the DEP would be required to hold a minimum of four public hearings in locations that would be directly affected economically by the proposal.

Following the public comment period, Senate Bill 119 would also require the DEP to submit a report to the House and Senate Environmental and Energy Committees detailing the specific economic and environmental impacts that joining RGGI would have on affected communities, the Commonwealth, and the PJM Interconnection region.

The legislation echoes language introduced in Senate Bill 950 and House Bill 2025, which were both introduced in the last Legislative session. House Bill 2025 received approval from both chambers, but was ultimately vetoed by Wolf in September 2020.