RGGI will impose a massive carbon tax on Pennsylvania coal and natural gas plants, which comprise two-thirds of Pennsylvania’s electric generation capacity. If not stopped by the PA legislature or courts, RGGI will increase the average operating costs by 70-80 percent for coal plants and 40-60 percent for natural gas plants, which in turn will increase electric bills by $800 million and monthly electricity costs by 30 percent. This will be especially hard for low and fixed income households, especially seniors, already suffering from energy poverty. Every coal and many natural gas plants will close immediately, and those that remain will be uncompetitive with plants in non-RGGI states. RGGI will also prohibit the construction of any new natural gas plants in Pennsylvania. Thousands of blue collar, union workers who build, operate and maintain those plants will be lost. Meanwhile, nearly 100 percent of CO2 reductions from PA power plant closures will be offset by increased CO2 emissions in non-RGGI states, like OH and WV, which will absorb PA generation, emissions and jobs into those states whose plants are not subject to the tax.
• Is RGGI authorized by law? Did the General Assembly intend to authorize the RGGI tax?
No. There is no law authorizing Governor Wolf to implement a tax on carbon dioxide from any source. Carbon dioxide, which is essential to life on earth (e.g., oxygen), is not considered a pollutant under Pennsylvania law. RGGI will impose an $800 million tax, per year, on all Pennsylvanians. As a legal scholar recently testified, only the Pennsylvania General Assembly has the power to levy a new tax under our state constitution. Every state within RGGI has clear authorization from its state legislature to implement RGGI or, like New York, regulate carbon dioxide. Pennsylvania does not. Also, Pennsylvania law requires public hearings to be physically held in regions impacted by regulations, and Governor Wolf is refusing to comply with that requirement.
• Will RGGI hurt the economy? Will it impact state tax revenues? Does RGGI have a negative impact on small businesses?
Yes. According to Governor Wolf’s own modeling, RGGI will trigger the near immediate closure of every coal and many natural gas plants throughout Pennsylvania. Some surviving power plants will be forced to reduce generation to reduce their RGGI tax liability, and others will see their operating margins narrowed in order to pay the tax. Pennsylvania ratepayers will be forced to absorb the $800 million per year RGGI tax, and low-income households will be disproportionally impacted. Thousands of family-sustaining blue collar and union jobs will be lost, school district property tax revenues will plummet, and Commonwealth tax revenues will decline from the loss of income taxes and shuttering businesses. This is why more than a dozen Pennsylvania labor unions, including the Pennsylvania AFL-CIO and the State Building and Construction Trades, oppose RGGI. RGGI will result in the loss of over 8,000 jobs, the loss of $2.87 billion in total economic impact, the loss of $539 million in employee compensation, and the loss of $34.2 million in state and local taxes.
The DEP’s own Small Business Advisory Committee (SBAC) rejected the draft RGGI regulation. The National Federation of Independent Business (NFIB) opposes RGGI. Why? Because RGGI will render two-thirds of our current electric generation uncompetitive or less competitive, and rates for small business owners will most definitely increase. In addition, there are many small businesses that serve host communities and plants, which will be hit particularly hard.
• Does RGGI protect the public health, safety and welfare?
No. The Governor’s modeling confirms that most, if not all, of the in-state Pennsylvania generation, jobs and capital investment will simply shift to coal and natural gas plants in neighboring, non-RGGI states, like West Virginia and Ohio. Consequently, carbon dioxide and other pollutant emissions will increase in those states, which will more than offset emission reductions in Pennsylvania. And Pennsylvania will be downwind from those plants. The DEP has used creative writing to grossly misrepresent any health or monetized benefits to the Commonwealth from the RGGI rule. Notably, the RGGI carbon dioxide “cap” will be reduced each year and, as a result, the RGGI tax rate will increase each year, which will trigger more plant closures and further impair grid reliability and affordability.
Many countries, like China, which has 250 GWs of new coal plants under construction, throughout the world are building hundreds of new coal fired plants making any theoretical reductions in Pennsylvania meaningless.
• Is RGGI feasible and reasonable for Pennsylvania?
No. RGGI makes no sense for a state like Pennsylvania, which possesses an abundance of coal and natural gas, and as a result, has the most reliable, affordable and resilient portfolio of electric generation in the country. No other RGGI state can boast these natural resource and generation assets, nor do those states generate sufficient electricity to accommodate their own consumption. Over the past few years, as a result of access to low-cost, reliable, natural gas reserves and our competitive market, 16 new natural gas-fired plants have been built in Pennsylvania (at a cost of nearly $16 billion). Those investments, and the prospect for new investment, will be undermined by the RGGI tax on two-thirds of our generation. Under RGGI, Pennsylvania’s role as the leader in electricity generation and as the leading exporter of electricity in our nation will diminish.
It is clear that Governor Wolf’s proposed RGGI tax regulation is not in the public interest. In fact, three public advisory boards within the Pennsylvania Department of Environmental Protection (PADEP) rejected the draft regulation. Nonetheless, PADEP continues to advance the RGGI tax regulation. In spite of Governor Wolf’s promise for “robust and public outreach” to impacted workers and communities, for which there was none, the Wolf Administration is now manipulating the regulatory process to eliminate any meaningful opportunity for the general public to share its concerns – an affront to the notion of regulatory transparency.
Aside from the thousands of jobs lost at shuttered power plants, even more would be lost in manufacturing, transportation logistics servicing power plants and manufacturers, producers of raw materials and manufactured products, the mining of raw materials, vendor services, and all the jobs that support these core industrial activities. Entire communities will be harmed due to the loss of the indirect and direct jobs, all because of Governor Wolf’s unilateral action.

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