Pennsylvania business leaders expressed growing impatience this week over Gov. Shapiro’s apparent waffling on campaign pledges to consider reneging on his predecessor’s moves to enlist the state in the controversial Regional Greenhouse Gas Initiative (RGGI).
Joining RGGI will likely lead to a sharp hike in power prices and also turn a sizable chunk of Pennsylvania’s prodigious electricity production capacity into an unrecoverable junk yard, witnesses said Monday at a hearing convened by the House Republican Policy Committee.
“The small business community is not giving up on the promises that Gov. Shapiro made during his gubernatorial campaign in which he stated he would consider removing Pennsylvania from RGGI,” said Greg Moreland, Pennsylvania State Director of the National Federation of Independent Business.
Moreland and David N. Taylor, President and CEO of the Pennsylvania Manufacturers’ Association, reiterated the idea that RGGI would unwisely strip Pennsylvanians of the benefits of the state’s ample fossil-fuel resources and effectively torpedo the entire economy in order to comply with RGGI’s cap-and-trade emission fees. The two executives as well as members of the business-friendly committee voiced frustration that Shapiro had so far not heeded those dire warning signs and pulled Pennsylvania back from the brink of disaster.
“There should be no further delay for Pennsylvania to reject RGGI, and we respectfully request Gov. Shapiro to withdraw our commonwealth immediately,” Taylor testified.
Pennsylvania tepidly joined RGGI last year under a 2019 executive order issued by Democratic Gov. Tom Wolfe, which bypassed the Republican-led legislature. Wolfe left office due to term limits and Shapiro, his attorney general, pledged on the campaign trail to reconsider the plan. Thus far, however, he has not pulled the trigger on that idea and continues to examine the issue.
“We must provide hope for all Pennsylvanians by ending the status quo,” said House Republican Policy Committee Chairman Joshua D. Kail (R-Beaver/Washington) “It’s time for the Democrats to end their political charades and join my colleagues and me in boosting our economy and making life more affordable.”
Meanwhile, the Pennsylvania Supreme Court heard oral arguments on May 24 on whether the RGGI fees amount to a tax on energy, which would require approval from the legislature. The implementation of RGGI rules has been postponed pending the outcome.
Some of Shapiro’s caution stems from projections that the cap-and-trade fees paid to RGGI would generate more than $600 million for Pennsylvania next year, which is earmarked for further clean air projects but would be also likely used for job training and other mitigations.
The Republicans, along with organized labor, see such steps as a mere Band-Aid that will in no way make up for the losses of high-paying jobs, property tax declines and higher electric bills for all businesses and consumers.
“The RGGI plan only makes sense if its goal is to stifle U.S. energy production, cripple American industry, kill off U.S. jobs, and bleed consumers with higher costs for food, fuel, and utilities,” Taylor said. Those funds have been included in Shapiro’s budget proposal for the coming year, which must be approved by the General Assembly.
Taylor pointed to Pennsylvania’s position as a net power exporter with a thriving business of selling electricity to neighboring states, including the RGGI roster. “The RGGI electricity tax is exactly the wrong approach to take, 180 degrees wrong,” he said.
“If the RGGI scheme is not thwarted, the new electricity tax will force the immediate closure of our remaining coal-fired electricity plants and older natural gas-fired plants,” said Taylor. “These facilities represent billions of dollars of critical infrastructure and a significant portion of our generation capacity.”
Taylor also headed off the idea of an unofficial trial run under the RGGI rules and pulling Pennsylvania out if the economic fallout is indeed unacceptable. He stated that shuttered power plants cannot simply be restarted. “If the furnaces at those plants are allowed to cool, they will then warp, crack, and shatter; destroying these assets while placing significant strains on our already fragile power grid,” he warned.
“Pennsylvania only barely escaped blackouts during the winter storm in December,” Taylor said. “We are on a collision course with reality if we don’t defend our plants today by rejecting the unconstitutional RGGI tax.”
He also noted that the Homer City Generation Station is now scheduled to close in July. Its owners said the decision was based on several factors, including that RGGI would severely limit its long-term planning and would handcuff the business in making further investments with an uncertain regulatory future.