by Gordon Tomb
Already struggling to cope with higher energy bills, Pennsylvanians are currently experiencing a double-digit rate hike this fall. In September, some suppliers increased electricity price Another 19%, citing inflation and energy costs. Pennsylvanians need relief, but Governor Tom Wolf’s unilateral action will send energy bills even higher. Worse still, a new lawsuit highlights Wolf’s plan that – while claiming to help the environment – will in fact increase emissions.
Despite objections from a majority of state legislatures, Wolf is forcing Pennsylvania to join the Regional Greenhouse Gas Initiative (RGGI)—a compact contract in which member states impose a carbon tax. for energy production. By discouraging energy production in Pennsylvania, the carbon tax would shut down some of the most efficient coal and natural gas operations in the world, and new lawsuit argued that the governor’s plan would lead to an increase in CO2 emissions.
petitioners, All operate gas-fired power plants in Bucks, York and Westmoreland Counties, among dozens of businesses, labor unions, trade organizations and politicians asking the courts to block the Pennsylvania’s participation in the RGGI.
Pennsylvania’s natural gas producers are among the cleanest in the world, as measured by methane emissions from their operations. Of the top nine hydrocarbon-producing basins in the United States, the Appalachian Basin, which includes Pennsylvania, emits the least methane per unit of energy produced.
And while US coal-fired power plants are among the least polluting worldwide, operators in Pennsylvania have invested billions of dollars in equipment to reduce water pollution and more air. The Homer City Power Plantfor example, has spent $750 million over the past decade to reduce pollutants.
But RGGI will set back our progress toward cleaner energy by imposing outrageous costs on energy producers in Pennsylvania.
The RGGI requires power plants to buy the allowed amount of carbon, and this figure has more than quadrupled in recent months. Only part of 2022, estimated contingency costs has increased to $847 million versus the Wolf administration’s initial prediction of $198 million.
“The (government) model of the CO2 allowance price… is completely unfounded,” the petitioners wrote. “Among other setbacks, (the authorities) did not fully consider the impact of speculative traders, like hedge funds, buying CO2 allowances as an investment.”
The costs imposed by the RGGI would force plants in Pennsylvania to reduce energy production, opening the door for less efficient plants in non-RGGI states to replace them. Total emissions will increase because less efficient plants have to burn more fuel to generate the same amount of electricity – producing higher emissions of carbon dioxide and pollutants like sulfur dioxide.
The petitioners note that “most of the benefits… arising from Pennsylvania’s participation in the RGGI will be lost or transferred to other regions as a result of increased emissions in other states.”
Prior research confirmed that the transition of emissions from RGGI states to non-RGGI states.
The quadruple price of the carbon allowance also means that RGGI will increase electricity costs even more. Energy producers will have to pass on the cost increase to consumers.
Moderate estimates suggest that RGGI raises consumer electricity prices about 2 billion dollars more than nine years. This is a “best case” scenario that cannot be tolerated by Pennsylvanian families.
RGGI is currently on hold thanks preliminary command, and petitioners are integrating their case with other lawsuits aimed at preventing state involvement. Because of pending courtIt is unlikely that companies will need to buy carbon allowances until the next governor’s term.
But Pennsylvania’s involvement in the RGGI – with its far-reaching consequences – should not be relied upon lone wolf tactic. The state legislature has taken the first step to introduce a Amended constitution that would prevent any governor from unilaterally imposing regulations, like the RGGI, despite objections from the legislature.
If approved by the Pennsylvania legislature and a majority of voters, this constitutional amendment could protect families from ineffective and costly regulations like the RGGI.
This commentary was first published in Delaware Valley Magazine on October 21, 2022 and can be accessed here.
CO2 Alliance Senior Advisor Gordon Tomb is a senior fellow of the Commonwealth Foundation, a free market consulting organization based in Pennsylvania.
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