RGGI Update: Pennsylvania Legislature Resists

RGGI Update: Virginia Escapes and Pennsylvania Debates (full series)
Virginia and RGGI | Clean Energy’s Dirty Footprint
Pennsylvania Legislature Resists | Avoiding the Democratic Process

Pennsylvania Legislature Resists Unilateral Executive Action

While regulatory relief efforts gather steam in Virginia, lawmakers in Pennsylvania are taking notice. Aptly named the Keystone State for the crucial role it played in the founding and development of the United States, it is Pennsylvania that could decide the future of RGGI. Tom Wolf, the state’s Democratic governor, first proposed having Pennsylvania join the climate change initiative in an executive order going back to October 2019.

“Climate change is the most critical environmental threat confronting the world, and power generation is one of the biggest contributors to greenhouse gas emissions,” Wolf said in the order. “Given the urgency of the climate crisis facing Pennsylvania and the entire planet, the commonwealth must continue to take concrete, economically sound and immediate steps to reduce emissions. Joining RGGI will give us that opportunity to better protect the health and safety of our citizens.”

State Sen. Gene Yaw, who chairs the Environmental Resources and Energy Committee, has joined with fellow Republicans and several Democrats to oppose joining RGGI. In a recent press statement, Yaw explained why Virginia’s experiences with the climate change regulations should be instructive to Pennsylvania:

Last year, the state’s utilities spent $227 million buying credits at the RGGI auction to offset the carbon emissions they generate.

That’s double what proponents of the program said it would cost and it will be ratepayers, almost exclusively, who will foot this bill. For those living at or below the poverty line, this de facto tax hits the hardest.

Yaw also noted that the clearing price for credits at auctions has quadrupled and that eight of the RGGI states are among the top 10 states with the most expensive electricity rates in the country.

Moreover, as an energy exporter, Pennsylvania does not exactly fit in with other RGGI states. This is a point Yaw frequently drives home. Pennsylvania is the second largest natural gas producing state, behind only Texas, and it is the third largest net supplier of energy to other states, according to figures from the U.S. Energy Information Administration. That’s largely because innovative drilling techniques like hydraulic fracturing have made it possible to extract large natural gas deposits from the Marcellus Shale formation, which cuts across Pennsylvania. The formation contains roughly 84 trillion cubic feet of natural gas making it perhaps the largest natural gas field in the nation. The switch from coal to natural gas has made it possible for Pennsylvania to reduce emissions without implementing expensive regulations.

“Pennsylvania emissions have been reduced by 38% since 2006 without RGGI—more than all the 12 participating states combined,” Yaw says in his release. “Moreover, our electricity rates come in 30% to 60% lower than those in RGGI states.”

So, what then is the point of having Pennsylvania join RGGI aside from enabling government regulators to exert more control over private companies?

Without acknowledging the progress in meeting and even exceeding RGGI emissions goals, Wolf, like Northam, fell back on climate change alarmism to cajole a skeptical public.

“Climate change is one of the most critical issues we face and I have made it a priority to address ways to reduce greenhouse gas emissions,” Wolf said last September after a regulatory review commission approved regulations that would enable Pennsylvania to participate in cap and trade with other states. “By participating in RGGI, Pennsylvania is taking a historic, proactive and progressive approach that will have significant positive environmental, public health and economic impacts.”

Wolf continued:

Participating in RGGI is one more way for Pennsylvania, which is a major electricity producer, to reduce carbon emissions and achieve our climate goals. In addition to the environmental benefits, participating in this cap-and-trade initiative will allow Pennsylvania to make targeted investments that will support workers and communities affected by energy transition.

In February, Wolf filed a lawsuit in the Commonwealth Court of Pennsylvania against the Legislative Reference Bureau to compel the bureau to publish “CO2 Budget Trading” regulations in the Pennsylvania Bulletin, the official register of new state laws. Senate Republicans have entered the fray by filing a request with the court to intervene in the suit.

“Governor Wolf’s effort to enter the compact by Executive Order through regulation bypassed the normal legislative process,” Yaw said in a press release. “Pennsylvania is the only state to attempt to enter RGGI without legislative approval.”

Yaw continued:

In response to the administration’s attempt to usurp the General Assembly’s authority to approve or disapprove any tax increase on Pennsylvania families and employers, both the Senate and the House of Representatives approved a resolution disapproving Pennsylvania’s participation in RGGI.

Put simply, elected officials’ message back to Wolf is “No taxation without representation!”—a battle cry that was heard throughout Pennsylvania and the other 13 original colonies during the American Revolution. In modern parlance, the phrase could be altered to “No carbon taxation without representation.” If Wolf can circumvent the state legislature to impose carbon taxes as part of RGGI, he could do lasting damage to the separation of powers and the constitutional checks and balances in Pennsylvania—all in the name of climate change.

“It creates a very slippery slope when the executive branch tries to create a new tax on Pennsylvania employers without the consent of the General Assembly,” lawmakers said in a joint statement. “We will continue fighting to preserve the General Assembly’s authority to legislate and protect consumers against the painful consequences of the Wolf administration’s deeply flawed ideology.”

Wolf vetoed the resolution from the General Assembly on January 10. The Senate has 10 legislative days or 30 calendar days, whichever is longer, to attempt a veto override.

The votes on the resolution in the Pennsylvania House and Senate indicated both bodies are a few votes shy of being able to override the veto. Legislative leaders working to close the gap could possibly attempt a veto override before the end of March. On April 4, the veto override failed in the senate by one vote.

In the meantime, an emerging bipartisan coalition continues to resist Wolf’s executive actions. In the House, seven of Wolf’s fellow Democrats co-sponsored a bill that would require the governor to submit his carbon tax plan to the General Assembly. The House vote was six votes shy of a veto-proof majority. The state Senate vote on the bill was just one vote shy of a veto-proof majority with five Democrats supporting the bill.

Somehow Wolf’s executive actions in Pennsylvania have not scandalized environmental activists and left-leaning attorneys as they did in Virginia when Youngkin moved against RGGI. Researchers would be hard pressed to find any such comments from environmental advocacy groups or high-ranking attorneys. The attitude here seems to be “executive power for me—under the banner of a climate change emergency—but not for thee if you don’t support the green agenda.”

If Wolf does try to force Pennsylvania into RGGI without a vote in the General Assembly, his actions will most certainly spark litigation from multiple sources. He will contend not just with elected officials in both parties, but also with Power PA Jobs Alliance, a coalition of business and industry.

At present, after the failed veto override, Pennsylvania will begin participating in RGGI on July1,

The Pennsylvania Governor’s Race

There’s also some election intrigue complicating the path forward with Wolf. First elected in 2014, he is term-limited and will be leaving office in January 2023. Attorney General Josh Shapiro, who is running unopposed in the Democratic primary to succeed Wolf, has expressed misgivings about RGGI.

Or to be more precise, he has expressed misgivings about how Wolf’s RGGI plans might impact him politically in what is already shaping up to be a tough year for Democrats. “I understand the aims of RGGI, and the goals,” he told the Indiana Gazette. “I have real concerns about the impact it will have on consumer prices, hurting families at a time when many are struggling really to put food on the table.”

That sounds encouraging from a free market perspective, but just a few weeks after making those remarks Shapiro’s Office of Attorney General approved the rule that would enable Pennsylvania to join the climate change agreement. A spokesperson for Shapiro’s campaign has told media outlets that Shapiro’s position has not changed, but no one knows what that position is including Shapiro. His attorney general’s office has issued banal statements about the “rule of law” that dance around any substantive comments about RGGI as a matter of policy. In fact, the office claims it cannot object to regulations based on policy concerns and can only act against regulations that are presented in “improper form.”

What happens next with RGGI in Pennsylvania probably depends on the outcome of the governor’s race. Despite all the sly legalese, it’s evident Shapiro views the climate change scheme as a political liability. Some of the unions affiliated with Power PA Jobs Alliance are on record opposing RGGI and might start asking some hard questions about Shapiro’s stance. Campaign finance records show trade unions have donated more than $2.4 million to Shapiro’s campaign so far. If the actions of the attorney general’s office are any indication of what Shapiro will actually do if elected governor, those unions should not expect a good return on their investment.

In the next installment, in both states RGGI proponents run away from the democratic process.