(The Center Square) \u2013\u00a0Energy is big business in Pennsylvania.<\/p>\n
Its storied fossil fuel reserves have kept utility bills lower and the regional power grid more stable for the better part of a century.<\/p>\n
That\u2019s remained key as states opt for lower-emission power sources, which have so far relied on fledgling technologies not yet able to keep the lights on with batteries, solar panels and wind turbines alone.<\/p>\n
A\u00a0new report<\/a> from the Commonwealth Foundation concludes it could have been even bigger business had state regulators not spent the last six years \u201cflirting\u201d with a carbon tax program called the Regional Greenhouse Gas Initiative, the success of which many critics say relies on the fossil fuels it means to curb.<\/p>\n For the program\u2019s most ardent supporters, the transition away from coal and gas must start somewhere. And, to them, a 50% reduction in emissions and $6 billion in revenue over the last 18 years isn\u2019t a bad one.<\/p>\n \u201cThe Keystone State\u2019s six-year on-again, off-again relationship with RGGI is a cautionary tale for other states, such as Virginia,\u201d said Elizabeth Stelle, vice president of policy for the Commonwealth Foundation. \u201cRGGI is a carbon tax in sheep\u2019s clothing, toppling the energy future of every state it touches.\u201d<\/p>\n RGGI, as the program is often referred to, profits from reductions in harmful emissions by charging generators for the air pollution they create, measured in carbon dioxide. Across 12 states in the mid-Atlantic and New England, power plants and industrial sites buy an ever-decreasing number of emissions \u201ccredits\u201d at the program\u2019s annual auction to cover that anticipated pollution.<\/p>\n Those credit prices have risen sharply since RGGI\u2019s first auction in 2008, and because of the balance needed between fossil fuels and renewable power, the program has put financial pressure on the entire grid, leaving utility companies \u2013\u00a0and by extension, ratepayers \u2013\u00a0scrambling to make up the difference.<\/p>\n Sometimes relief comes from RGGI-funded bill-reduction programs administered by participating states. Or the proliferation of more efficient renewable sources, supported by government taxpayer-funded subsidies, that require less support from gas and coal. In recent years, it\u2019s been the pooling of smart thermostats, rooftop solar panels, and battery storage to compensate consumers for lower electricity usage.<\/p>\n And yes, it\u2019s been rate increases too. But if not for Pennsylvania<\/a>, where 25% of the regional power grid\u2019s electricity is sourced, conventional wisdom has long held that those hikes could have been far steeper.<\/p>\n Which is why former two-term Democratic Gov. Tom Wolf\u2019s 2019 executive order adding Pennsylvania to the RGGI program triggered a six-year regulatory war with lawmakers<\/a> to stop it before it ever happened.<\/p>\n The foundation, a conservative policy group based in Harrisburg, was among the loudest critics \u2013\u00a0behind legislative Republicans, with whom the organization typically aligns \u2013\u00a0of the proposal, citing quadrupled energy costs and a $5 billion investment shortfall, according to its report.<\/p>\n In terms of raw numbers, the chilling effect of potentially joining RGGI is stark. Between 2013 and 2018, 73% of proposed power projects in the commonwealth became operational. After regulators set their sights on RGGI in 2019, that conversion rate collapsed to 9%.<\/p>\n By comparison, the rate for Ohio \u2013\u00a0a non-RGGI state with a wealth of fossil fuel plants \u2013\u00a0declined much more slowly, from 62% to 48%, in part due to falling gas prices.<\/p>\n \u201cUnfortunately, that loss is not shocking,\u201d Stelle said. \u201cWhile Pennsylvania debated, litigated, and delayed over carbon tax policy, Ohio provided developers with a predictable regulatory environment to commit billions in capital. Projects that might have started in Pennsylvania went to Ohio or never came to fruition.\u201d<\/p>\n Losing to \u201cfriggin\u2019 Ohio\u201d has jokingly been a thorn in the side of first-term Democratic Gov. Josh Shapiro since he took office in 2023, even calling out the Buckeye State\u2019s competitive economic policies during his first budget address to the General Assembly.<\/p>\n Shapiro, on the campaign trail, expressed his doubts about RGGI, though he continued the Wolf administration\u2019s legal fight to make Pennsylvania participate for two more years, only dropping it as part of a four-month-late budget deal this past November.<\/p>\n RGGI detractors say taxing generators would not just make it less profitable to build new power plants. It would raise energy costs for everyone by accelerating the closure of long-serving facilities, reducing supply, and raising electricity prices.<\/p>\n Shapiro, too, worries about affordability and instability, though he\u2019s pointed the finger at PJM, the organization that manages the power grid, and at its lengthy planning process. He even filed complaints with federal regulators to force the organization to lower electricity price caps, temporarily preventing a 30% spike for ratepayers.<\/p>\n He\u2019s even threatened, more than once, to decouple the state from the grid and \u201cgo it alone\u201d \u2013\u00a0an unprecedented move that could undo a century of cooperation.<\/p>\n It hasn\u2019t come to that yet. Instead, Shapiro has lobbied the General Assembly to act on his state-centric Lightning Plan to quadruple wind and solar power over the decade \u2013\u00a0and still limit emissions from larger plants.<\/p>\n Stelle said doing so would double residential electricity bills.<\/p>\n \u201cAffordable, reliable energy is not achieved through Green New Deal-style mandates and burdensome regulation,\u201d she said. \u201cIt happens naturally when we pursue policies that welcome the investment its grid desperately needs, letting Pennsylvania\u2019s rich energy sector do what it does best.\u201d<\/p>\n In the eyes of some, air pollution is what the energy industry does best. In 2020, federal data ranked<\/a> Pennsylvania fourth nationwide for carbon emissions, and estimates suggest that 1% of global greenhouse gas pollution comes from the commonwealth alone.<\/p>\n Supporters of programs like RGGI often point to the dual impacts of reduced emissions and investment in renewable technology as key to their value for an energy-rich state like Pennsylvania.<\/p>\n