Committee Approves Bill Requiring Legislative Approval of RGGI Deal

 

The Senate Environmental Resources & Energy Committee (ERE) today (April 27) approved a bill introduced by Senator Joe Pittman that would require Legislative approval of the Governor’s proposal to have Pennsylvania join the Regional Greenhouse Gas Initiative (RGGI).

Senate Bill 119, which creates the Pennsylvania Carbon Dioxide Cap and Trade Authorization Act, specifically prohibits the Department of Environmental Protection (DEP) from joining RGGI – or any similar pact — without Legislative approval.

“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 Senator 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 the co-sponsorship memo for Senate Bill 119 circulated by Senator Pittman; Senator Gene Yaw, ERE Chairman; and Senator David Argall, Chairman of the Senate Government Committee, the Senators wrote: “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.

“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 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.”

On October 3, 2019, Governor Wolf directed the Department of Environmental Resources (DEP) to join RGGI — a collaboration of 11 Northeast and Mid-Atlantic states. The states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia) set a cap on total Carbon Dioxide (CO2) emissions from electric power generators in their states. In order to comply, power plants must purchase a credit or “allowance” for each ton of CO2 they emit.

If Pennsylvania joins RGGI, it would be the only major energy producing state in the compact and the resulting carbon tax on employers engaged in electric generation would devastate that industry and cost thousands of jobs.

Since the Governor’s edict, three DEP advisory boards have rejected the proposal. Most recently (February 16) the Independent Regulatory Review Commission called for a one-year moratorium on its implementation and Senate Republicans halted consideration of PUC nominees pending the Governor’s withdrawal of his unilateral decision to join the compact without legislative approval.

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 the comment period, 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, DEP would be required to submit a report to the House and Senate Environmental Resources & Energy Committees detailing the specific economic and environmental impacts that joining RGGI would have on impacted communities, the Commonwealth, and the PJM Interconnection region.

Senate Bill 119 mirrors the language of Senate Bill 950 and House Bill 2025 that were introduced during the last Legislative Session. The Governor vetoed House Bill 2025 – which had received bipartisan support in both chambers – last September.

Audio of Senator Pittman’s comments on the bills at the meeting. Video of the full meeting.

Contact:           Jeremy Dias                jdias@pasen.gov