A controversial plan that charges power generators for the carbon pollution they emit cleared a crucial regulatory hurdle Wednesday as Pennsylvania nears its 2022 deadline for entry into the multi-state Regional Greenhouse Gas Initiative (RGGI).
After fielding more than five hours of public comments, the Independent Regulatory Review Commission (IRRC) voted 3-2 in favor of adopting the Department of Environmental Protection’s proposed rules for capping carbon emissions from the state’s power sector through RGGI’s annual auction.
“It is clear that whatever the commission did today, we would get criticism,” said Chairman George Bedwick before approving the DEP plan. “What I do hope we can all agree is that we have made every effort to approach the issue with an open mind.”
RGGI requires power producers in participating states to buy emissions credits through an annual auction designed to reduce pollution throughout the region. States then reinvest the proceeds into programs that further promote emissions reductions and energy efficiency.
Gov. Tom Wolf signed an executive order in October 2019 that directed DEP to begin crafting regulations for Pennsylvania’s entry into RGGI. It will be the 12th state to join the program and the first to do so without the blessing of its General Assembly.
It’s a step Republican lawmakers believe the constitution requires. Beyond that, legislators from districts where the state’s last remaining coal plants still operate say RGGI will shutter the facilities years too early and leave thousands unemployed.
And, they say, it will undermine Pennsylvania’s role as the region’s top power producer.
“It’s easy to say that I’m going to stand for the environment and we will see how that shakes out,” said Commission Vice Chairman John Mizner before voting against the plan. “But when I think of those people, especially in Indiana and Armstrong [counties], whose livelihoods for generations have relied on coal, I don’t think we’ve thought enough through how we are going to help them when it’s them who are going to bear the most cost.”
Supporters of the plan argue that allowing Pennsylvania’s carbon emissions to go unchecked will lead to negative health outcomes and accelerate the impacts of climate change to the point of no return.
“It is apparent, at least to me, that there is a need for much more to be done,” Commissioner Murray Ufberg said. “I greatly regret the notion that employment in certain sectors and geographical sectors will be greatly affected. But just as regulation will cause some displacement, so too must government assist, very substantially, in assuring that it’s not so severe that it demoralizes the population and prevents it from recovering.”
The DEP said the annual carbon dioxide allowance budget in the 2022 RGGI auction – the first in which Pennsylvania could participate – will total 78 million metric tons. By 2030, this allowance will shrink 25% to 58 million metric tons.
The effect will reduce the amount of emissions from carbon dioxide, sulfur dioxide and nitrogen oxide while lowering rates of childhood asthma, respiratory disease, premature deaths, lost work days and health care costs, according to the DEP.
Wolf said the program will also increase state GDP by $2 billion over the next decade, in addition to creating 27,000 jobs and eliminating as much as 225 million metric tons of carbon dioxide from the atmosphere.
Regionally, participating states have cut power sector carbon pollution 45% since 2005 and provided “direct bill assistance” to more than 1.5 million households during its first six years of existence.
Critics argue, however, that joining RGGI trades thousands of power plant jobs for minuscule reductions in carbon emissions that will be all but erased by increased output in nonparticipating states such as Ohio and West Virginia. Some industry estimates forecast electricity rates could spike between 12% and 18% for consumers if RGGI is enacted.
“When things hit the proverbial fan, you see incredible damage throughout the economy,” Mizer said. “I fear that issues like coal and steel may go the same way. Maybe not tomorrow, but at some time in the future, people are going to say how did we get in situation where can’t produce our own coal or our own steel.”
The vote comes six months after the panel asked the DEP to delay its RGGI rule making process for a year as too many questions remained about the program’s purported environmental and health benefits, as well as its impact on the economy and the overall cost it would impose on electricity consumers.
At the time, IRRC expressed skepticism that bypassing legislative approval to enter the program made sense, either.
The DEP said the Clean Air Act gives the administration the authority to join the program without approval from the General Assembly.
Bedwick said Thursday that he believes the grant of authority within the Air Pollution Control Act is “pretty broad … and as a result I cannot definitively say the department does not have the statutory authority to do that.”
Legal challenges to DEP’s regulation are anticipated in the coming months, Bedwick added, which will ultimately slow the timeline for entry into RGGI.
Wolf said Thursday he was grateful for IRRC’s approval.
“Participating in RGGI is one more way for Pennsylvania, which is a major electricity producer, to reduce carbon emissions and achieve our climate goals,” he said. “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.”
House Environmental Resources and Energy Committee Chairman Daryl Metcalfe, R-Cranberry Township, released a statement immediately following that vote that said “Resistance to the governor’s delusional and unlawful RGGI scheme must be absolute.”
“Make no mistake, the governor, EQB [Environmental Quality Board] and now IRRC are all fully complicit in assaulting the Constitution, the law and the people of Pennsylvania,” he said.
The Attorney General now has 30 days to review the regulations.
The Power PA Jobs Alliance said it trusts the state’s top law enforcement official will “undertake a thorough review of this unconstitutional and illegal regulation, and ultimately concede that there is no scenario where the 1972 and 1990 General Assembly could have ever contemplated DEP to have such enormous discretion to restructure electric generation, subsidize out-of-state fossil fuel generation and increase electric rates under the Air Pollution Control Act.”
The advocacy group then encouraged the General Assembly to support a concurrent resolution that would halt the regulatory process altogether and suggested enough votes existed for a potential veto override.
“We have the support of virtually all House and Senate Republicans, and approximately a third or more from House and Senate Democrats for legislation that would require express prior authorization from the General Assembly before proceeding with entry into RGGI,” said Tom Meinart, a spokesperson for the alliance.
Other advocacy groups, like the Environmental Defense Fund, said the vote represents an “important milestone” that moves Pennsylvania “one step closer toward meeting its climate goals for one of its biggest polluting sectors.”
PennFuture CEO Jacquelyn Bonomo likewise applauded the development as the latest in a long and “robust” public process.
“Our climate is at a tipping point, and the time is now to do everything in our power to cap and reduce carbon emissions,” she said. “PennFuture looks forward to doing its part in getting this carbon reduction rule across the finish line in the weeks and months ahead.”
