Pa. to join RGGI. Here’s what it means

Source: By Benjamin Storrow, E&E News reporter • Posted: Sunday, October 6, 2019

Pennsylvania has long been a great white whale to climate hawks in the Northeast.

When 10 Northeastern states formed a cap-and-trade program for power plants a decade ago, the Keystone State was absent. Pennsylvania’s penchant for coal meant its power plant emissions dwarfed its neighbors. But it also made the state’s leaders leery of cap-and-trade programs.

That changed yesterday, when Gov. Tom Wolf (D) signed an executive order directing the state to pursue membership in the Regional Greenhouse Gas Initiative, the Northeast’s cap-and-trade program for power plants.

The move amounts to the most significant development for RGGI since its inception in 2008. Pennsylvania power plants emitted more carbon than their counterparts in all the RGGI states last year. It would also greatly expand the climate program’s footprint in the PJM Interconnection LLC, the largest wholesale electricity market in the nation.

Wolf’s announcement kicks off a lengthy rulemaking process that promises to pit the governor and environmentalists against Republican lawmakers who control the Legislature in Harrisburg. Republicans floated a bill last month that would require legislative approval for state membership in RGGI.

Wolf has proved a cautious climate advocate. After running on a pledge to join RGGI in 2014, he let the matter drop in his first term. But climate change has become a greater focus since the governor won reelection last year. Wolf has released a climate action plan and established carbon reduction goals in recent months (Climatewire, Jan. 22).

“This is really the first piece that takes direct aim at how do we begin reducing our carbon footprint here,” said John Walliser, senior vice president for legal and government affairs at the Pennsylvania Environmental Council. “RGGI is a phenomenal start because you’re making that committment to a reduction.”

In a press conference yesterday, Wolf said the state is facing a climate crisis. He noted that 2018 was the wettest year in state history, resulting in crippling floods.

The governor touted a recent study of RGGI’s benefits by the Acadia Center, which showed the program’s members had grown their economies and seen electricity rates decline, all while cutting emissions 90% faster than the rest of the country.

“That’s a carbon dioxide decrease we desperately need if we want the next generation of Pennsylvanians to be able to enjoy a world without mass extinction and collapsed ecosystems,” Wolf said.

He appeared to extend an olive branch to Republicans, saying, “We know we can’t complete this process in a vacuum,” and adding, “It will take buy-in from the Legislature to ensure that we’re protecting Pennsylvanians from the increasing risks of this climate crisis.”

That promises to be difficult. Leading lawmakers voiced immediate skepticism about the governor’s plan.

State Sen. Gene Yaw, a Republican who chairs the Environmental Resources and Energy Committee, wondered on Twitter why Pennsylvania would enter a partnership with Northeastern states that have sought to block new pipeline projects that would carry natural gas from the Keystone State to markets in the Northeast.

“It is clear to me we have very little in common with NY, NJ, & the New England states,” he wrote.

Gene Barr, CEO of the Pennsylvania Chamber of Business and Industry, expressed caution. Climate change is real and needs to be addressed, but the state’s actions should be balanced with economic needs, he said in a statement.

“We encourage legislative input and an analysis of costs to ratepayers and the industry in order to ensure that the Commonwealth’s approach to greenhouse gas regulations is balanced, making sure to leverage the state’s great energy assets and encourage private sector competition without stifling potential economic growth,” Barr said.

The political landscape mirrors the dynamic in Virginia, where Gov. Ralph Northam (D) saw his attempt to join RGGI get thwarted by Republican lawmakers earlier this year (Climatewire, May 3). Republicans barred the state from spending any money to join the program.

The stakes for RGGI are even higher in Pennsylvania. The state is an energy powerhouse. It’s the second-largest producer of natural gas, the third-largest miner of coal and third-largest generator of electricity.

Pennsylvania’s power sector has undergone dramatic changes in recent years. Where coal accounted for 57% of electricity generation in 2001, it represented just 22% in 2017.

Much of coal’s decline has been offset by natural gas, which has been buoyed by the drilling boom in the Marcellus Shale formation that underlies much of the state. Bruce Mansfield, the state’s largest coal plant, will close later this year.

The plant is also Pennsylvania’s largest CO2 emitter. It reported emitting 161 million tons of carbon between 2008 and 2018, EPA data shows, or 14% of all Pennsylvania power plant emissions over that time.

Yet Pennsylvania remains a major source of carbon dioxide emissions. In 2018, the state’s power plants emitted 81 million tons of carbon, EPA figures show. That was more than the 75 million tons of CO2 emitted by power plants in the nine states that constituted RGGI that year. New Jersey, a founding RGGI member that left the program in 2011, is not included in that figure. It rejoined earlier this year.

“There is no doubt we’ve already achieved what the Obama administration had laid out for us because of the decline of coal-fired plants and the rise of natural gas,” said David Hess, a former secretary of the state Department of Environmental Protection under two Republican governors. “I think where the administration is coming from is we’ve squeezed all the juice out of that orange that we can and the next steps will require additional action.”

RGGI representatives welcomed Wolf’s announcement. A larger program with more participants creates more economic efficiencies, driving greater emission reductions and consumer savings, said Ben Grumbles, secretary of the Maryland Department of the Environment and RGGI chair.

“The RGGI states welcome the interest from Pennsylvania and look forward to future discussions regarding the state’s potential participation in RGGI,” he said.

The political debate in Pennsylvania centers around how much authority the governor has to join the program. The Wolf administration contends the state’s Air Pollution Control Act gives the governor the power to act on his own.

Yet administration officials conceded that decisions about how to spend the money generated by RGGI’s quarterly auctions are more complicated.

“I think that’s in particular one of the areas where we want to be working with the Legislature,” Patrick McDonnell, the state Department of Environmental Protection secretary, said in an interview. “Obviously with it being Air Pollution Control Act, use of any of those revenues for the purposes would be limited with the purposes of the act, but I think there’s broader opportunities there we’ve seen the other states engage in.”

RGGI member states have plowed much of the revenues generated by the program’s auctions into energy efficiency programs, helping consumers realize $2.3 billion in energy savings over the program’s lifetime.

A petition submitted to Pennsylvania regulators earlier this year called on the state to implement an economywide cap-and-trade program (Climatewire, April 18). McDonnell said the state chose to pursue RGGI because it has a proven record of cutting emissions without causing electric bills to rise.

“I think that that’s one of the things that gives us comfort going into the decision,” he said.