State Senate Votes to Block Pa. Participation in RGGI

Pennsylvania’s participation in the Regional Greenhouse Gas Initiative (RGGI) is heading down an uncertain path as the state Senate recently passed a resolution disapproving the rule that would allow it to join. Attorney General Josh Shapiro also signaled that he is not in favor of it.

The RGGI is designed to reduce greenhouse gas emissions by creating a cap-and-trade program for the state’s power plants. Gov. Tom Wolf signed an executive order in 2019 that directed the state Department of Environmental Protection to begin a rulemaking process that will allow Pennsylvania to participate.

RGGI is an initiative of 11 New England and Mid-Atlantic states to cap and reduce their power sector carbon dioxide (CO2) emissions. This is achieved by setting a regional cap, or limit, on CO2 emissions from electric power plants in the participating states. Allowances equal to tons of CO2 that will enter the atmosphere from power plants are auctioned quarterly, and electricity generators must buy the amount needed to cover their emissions, with the proceeds going to the states. Pennsylvania’s participation in RGGI is estimated to bring in about $300 million in the first year.

The Environmental Quality Board and the Independent Regulatory Review Commission have both given their approval to final rulemaking for the CO2 Budget Trading Program, which would allow Pennsylvania to join RGGI in 2022.

However, Wolf’s plan to join RGGI has been met with opposition from the coal industry, labor unions, and many Republican legislators as well as lawmakers representing coal mining communities, including those in the Southwestern part of the state. The Senate recently voted to disapprove the regulation, and the state House now has 10 legislative or 30 calendar days, whichever is longer, to take action on the resolution. If it does not it will be deemed approved by default. If the House also votes to disapprove, the Governor would likely veto the resolution, but the Senate could attempt an override, and the vote to disapprove was close to the two-thirds needed.

Shapiro, who announced recently he was a Democratic candidate for governor, has also added to the uncertainty with recent statements that he does not think RGGI is the proper climate change and energy strategy vehicle that will also protect energy jobs in the state. Should he be elected, he could end the state’s participation in the consortium.

Even if the legislative maneuvering is not successful in stopping the state’s participation, Republican legislative leaders have signaled that legal action could be the next step. The possibility of Pennsylvania joining RGGI in early 2022, the goal set by Wolf, hangs in the balance.