PA Environment Digest Blog: Gov. Wolf Issues Executive Order Directing DEP To Join Regional Initiative To Limit Greenhouse Gas Emissions From Power Plants

On October 3, Gov. Tom Wolf took executive action instructing the Department of Environmental Protection to join the interstate Regional Greenhouse Gas Initiative (RGGI), a market-based collaboration among nine Northeast and Mid-Atlantic states to reduce greenhouse gas emissions from power plants and combat climate change while generating economic growth.

“Climate change is the most critical environmental threat confronting the world, and power generation is one of the biggest contributors to greenhouse gas emissions,” said Gov. Wolf. “Given the urgency of the climate crisis facing Pennsylvania and the entire planet, the Commonwealth must continue to take concrete, economically sound and immediate steps to reduce emissions. Joining RGGI will give us that opportunity to better protect the health and safety of our citizens.”
Transportation Cap-And-Trade

This is the second major step the Wolf Administration took this week on climate change.

On October 2, Pennsylvania and the 12 other states and jurisdictions participating in the regional Transportation and Climate Initiative have made available a framework for a draft regional policy proposal to reduce greenhouse gas pollution from transportation, and are encouraging interested individuals and organizations to provide feedback on the draft framework through the TCI portal.

The policy framework calls for a regional cap-and-trade program be established covering transportation fuel suppliers in the region covered by the Initiative. Click Here for more.

RGGI Program

Participating states have agreed, either through regulation or legislation, to implement RGGI through a regional cap-and-trade program involving CO2 emitting electric power plants.

These states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont) set a cap on total CO2 [carbon dioxide] emissions from electric power generators in their states.

In order to show compliance with the cap, power plants must purchase a credit or “allowance,” for each ton of CO2, they emit. These purchases are made at quarterly auctions conducted by RGGI.

The most recent RGGI auction held September 4th resulted in an allowance price of $5.20 per ton. The proceeds from the auctions are allocated back to the participating states in proportion to the amount of carbon subject to regulation in each state.

“This initiative represents a unique opportunity for Pennsylvania to become a leader in combating climate change and grow our economy by partnering with neighboring states,” said Patrick McDonnell, secretary of the Department of Environmental Protection. “As a major electricity producer, Pennsylvania has a significant opportunity to reduce emissions and demonstrate its commitment to addressing climate change through a program with a proven track record.”

The RGGI states have reduced power sector CO2 pollution by 45 percent since 2005, while the region’s per-capita GDP has continued to grow.

Through its first six years of existence, RGGI investments were found to return $2.31 billion in lifetime energy bill savings to more than 161,000 households and 6,000 businesses that participated in programs funded by RGGI proceeds, and to 1.5 million households and over 37,000 businesses that received direct bill assistance.

Pennsylvania exports nearly a third of the electricity it produces, and the cost of RGGI compliance for exported electricity will be paid by electric customers in the states where that electricity is ultimately used.

“We know that we can’t complete this process in a vacuum. The conversation we’ve begun over the past year needs to continue if we are going to craft regulations that fit Pennsylvania’s unique energy mix, while making sure that the transition to a cleaner energy mix doesn’t leave behind workers and communities our state has relied on for decades to produce its power,” said Gov. Wolf. “And it will take buy in from the legislature to ensure we’re protecting Pennsylvanians from the increasing effects of the climate crisis.”

Reducing CO2 emissions as part of combating climate change is a top priority for the Wolf Administration.

In January, Gov. Wolf signed an executive order to set Pennsylvania’s first statewide climate goals, aiming to reduce greenhouse gas emissions by 26 percent by 2025 and by 80 percent by 2050, compared to 2005 levels.

The scientific consensus is the planet is experiencing climate change in real time, and the impacts are felt everywhere.

In 2015, the Pennsylvania Climate Impacts Assessment Update found that Pennsylvania has undergone a long-term warming over the prior 110 years, and that current warming trends are expected to increase at an accelerated rate with average temperatures projected to increase an additional 5.4 degrees by 2050.

Average annual precipitation has also increased by approximately 10 percent over the past 100 years and, by 2050, is expected to increase by an additional 8 percent.

The numerous negative effects of these warming and wetting trends are currently being experienced in Pennsylvania.

Last year was the wettest year on record in the Commonwealth, and these increases in rainfall resulted in extreme weather events and flooding throughout the state costing residents an estimated $144 million in reported damages, and at least $125 million in state-maintained road and bridges damage throughout the state

“We are seeing the immediate and devastating impact of climate change right here in Pennsylvania, with more intense rainstorms leading to flooding occurring outside flood zones, and dry conditions that can increase the threat of fire in our wooded areas,” said Randy Padfield, director of the Pennsylvania Emergency Management Agency. “Combatting climate change demands cooperation among many state agencies but also a proactive approach, and joining RGGI will help reduce carbon emissions, which will, in turn, reduce the threat of weather-related natural disasters.”

Following the governor’s executive order, DEP will draft a regulation to present before the Environmental Quality Board for approval, and a public comment period will follow.

As directed in the Executive Order, DEP will conduct robust outreach to the business community, energy producers, and labor and environmental stakeholders.
[Note: The EQB accepted a rulemaking petition in April to study creating a cap-and-trade program covering all sources of greenhouse gas emissions.]

Click Here for a copy of the Governor’s Executive Order.

For more information, visit DEP’s Climate Change webpage.

Republican Bills Already Announced To Require Approval Of Joining RGGI

On September 16, Representatives James Struzzi (R-Indiana), Donna Oberland (R-Clarion) and Pam Snyder (D-Fayette) announced plans to introduce legislation to protect coal-fired power plants from any proposed carbon tax by requiring the approval of the General Assembly to join the Regional Greenhouse Gas Initiative or similar programs.

Similar legislation is expected to be introduced in the Senate by Senators Joe Pittman (R-Indiana), Gene Yaw (R-Lycoming), Majority Chair of the Senate Environmental Resources and Energy Committee, and David Argall (R-Schuylkill).

The bill was introduced to protect further closures of coal-fired power plants. The sponsors of the bills said, “Since Pennsylvania deregulated its electricity market, 19 coal-fired electric generating units (EGUs) have or are in the process of closing or converting.”

Click Here for a copy of the co-sponsor memo.

In October 2014 Gov. Corbett signed legislation sponsored by Rep. Snyder into law which authorized a one-chamber veto of any greenhouse gas emission reduction plan submitted by Pennsylvania to the U.S. Environmental Protection to meet federal Clean Power Plan requirements.

At the time, EPA was requiring states to develop plans for meeting its Clean Power Plan to reduce climate emissions. Since then that requirement was withdrawn by the Trump Administration, however that withdrawal and a replacement plan is being challenged in court by Attorney General Shapiro, other states and environmental groups.

Pennsylvania, as a result of the closure of coal-fired power plants and the surge in natural gas use to generate electricity has exceeded its obligations to reduce greenhouse gas emissions under the original Clean Power Plan.

In 2016, Gov. Wolf signed into law an amendment to that 2014 law extending the timeline for the General Assembly’s review of any greenhouse emission reduction plan submitted to EPA and prohibiting DEP from submitting any plan to implement the Clean Power Plan until the U.S. Supreme Court lifts its stay on EPA’s Clean Power Plan. At the time, legal challenges to the Clean Power Plan were working their way through federal courts.

Although no language was posted for this new bill, it could be modeled after the 2014 law.

A carbon tax has also been suggested as one way to provide the subsidies needed to keep nuclear power plants open in Pennsylvania.

Reaction - Legislators

Sen. Gene Yaw (R-Lycoming), Majority Chair of the Senate Environmental Resources and Energy Committee, issued the following statement on the Governor's executive order--

“There are a lot of unanswered questions as to what entering RGGI would entail for the citizens of Pennsylvania. Perhaps the most important is “cost.” How is this going to impact industry? We have numerous gas fired power plants, as well as coal. What is the impact going to be on the petrochemical cracker plant in Beaver County?

“I support efforts to reduce greenhouse gas emissions, but it is worth noting that, since RGGI began trading allowances in 2009, the current nine RGGI states have reduced carbon emissions by 17 percent, while Pennsylvania has reduced carbon emissions by 28 percent. This was accomplished all without government mandate and at great savings to consumers.

“Furthermore, it is clear to me we have very little in common with New York, New Jersey, and the New England states. Maybe we have more of an interest with Ohio and West Virginia, especially when it comes to coal and natural gas.

“How can we have a common interest with New York and the New England region when they prohibit the importation of our gas? They thumb their nose at Pennsylvania gas and embrace and purchase gas from Russia.

“For a step of this magnitude, which affects consumers, business, industry and public policy – the legislature, who represents the citizens of this state, must be involved in the dialogue on joining RGGI. It cannot be a unilateral decision.”

Sen. John Yudichak (D-Luzerne), Minority Chair of the Senate Environmental Resources and Energy Committee, offered this comment-- “I applaud Governor Wolf for initiating the important conversation about Pennsylvania’s entry into RGGI which will put Pennsylvania at the forefront of addressing climate change.

"Climate change is a real, priority level one threat to our environment that deserves the full attention of the legislature that this executive action will require.

"As DEP begins their outreach, it will be vitally important for them to have an open dialogue with the legislature and I look forward to participating in discussions to effectively and swiftly deal with climate change.”

Senate President Pro Tempore Joe Scarnati (R-Jefferson) and Senate Majority Leader Jake Corman (R-Centre) issued these comments on Gov. Wolf's proposal--

“Throughout the last 10 years we have supported many initiatives that have resulted in Pennsylvania’s greenhouse gas reductions that eclipse the CO2 [carbon dioxide] reductions in RGGI states. As a net-exporter of electricity, we know that energy production is a vital part of our state’s economy.

“Moving forward to the next chapter of greenhouse gas reductions must be done in a manner that adheres to the four energy principles of Senate Republicans:

-- Maintain the diversity of PA’s current energy portfolio and the jobs it sustains;

-- Protect the interests of PA consumers by keeping energy rates affordable and low;

-- Require the current members of RGGI to utilize all aspects of PA’s robust energy portfolio;

-- Implement any carbon reduction plan in PA through an appropriate legal manner.

“We expect that the legislature will have the opportunity to engage in this process, to make sure that any change in energy policy ensures a balance between safeguarding the environment, preserving energy jobs and protecting ratepayers.”

Senate Minority Leader Jay Costa (D-Allegheny) had these comments on Gov. Wolf's actions--

“Today’s executive order is a strong display of leadership from the Governor on one of the most serious issues facing Pennsylvania, this nation, and the world. Leadership from the federal government is not coming on climate change, and we can’t afford to wait.

“I introduced Senate Bill 15 as a legislative option for Pennsylvania to join RGGI, and I’ll continue to push for that. I stand with Governor Wolf and all champions for clean air as we work together to find creative, forward-thinking solutions for Pennsylvania.”

House Republican Leaders issued this statement on Gov. Wolf's action--

“The regulation of carbon dioxide presents significant impacts on our economy, the environment and on the bottom line for Pennsylvania families.

“The people of our Commonwealth, as represented and heard through the General Assembly, have the absolute right to review, approve or disapprove any plan that has such far reaching implications. This move calls for another new energy fee on Pennsylvanians. Taxpayers will pay more every time they flip a switch, make breakfast or charge their phone.

“We strongly disagree with Gov. Wolf’s continued practice of go-it-alone approaches that are unhelpful in working cooperatively to move our Commonwealth forward in a way that best represents the interests of all Pennsylvanians.

“Our state is not an autocracy, and one-sided decisions as significant as this leave out the important voices of Pennsylvania workers, communities and families whose livelihood is built upon important sectors of our energy economy. Pennsylvania’s energy sector is currently reducing greenhouse gas emissions by as much as 30% in recent years according to some estimates, and the industry is doing this without burdensome regulations.

“We believe the executive branch cannot bind the state into multi-state agreements without the approval of the General Assembly, and we plan to execute the fullest extent of our legislative power on behalf of the people of Pennsylvania.”

Rep. Daryl Metcalfe (R-Butler), Majority Chair of the House Environmental Resource and Energy Committee, offered these comments--

“Gov. Wolf’s unilateral decision to take the first step toward joining the RGGI illegally and unacceptably exceeds the authority of the executive branch and bypasses the General Assembly’s constitutional mandated responsibilities.

“While he cites the Air Pollution Control Act as his authority to do so, the act clearly states that the Department of Environmental Protection (DEP) has the authority to ‘…formulate interstate air pollution control compacts or agreements for the submission thereof to the General Assembly.’ This language requires and anticipates that while DEP may formulate an agreement, such an agreement may not be entered into without submission to the General Assembly for approval.

“In the press conference discussing this issue today, the governor said repeatedly when responding to a question that he was ‘pretty sure’ that he had the authority to issue the executive order on RGGI. ‘Pretty sure’ is not remotely satisfactory to the citizens of Pennsylvania who this announcement will negatively impact.

“His halfhearted answer demonstrates clearly that he knows he has exceeded his authority once again to the detriment of Pennsylvanians across the state who will be paying higher energy costs due to this irresponsible action.

“On Sept. 19, 2019, just two short weeks ago, I chaired an informational meeting of the House Environmental Resources and Energy Committee to discuss the governor’s actions to combat climate change. I asked DEP Secretary Patrick McDonnell point blank whether the administration planned to come to the Legislature after they were done researching RGGI to talk more about what would need to be done by the General Assembly to enable the administration to enter into an agreement to join RGGI.

“Secretary McDonnell stated that DEP is still looking at all the elements of this and that DEP has been in conversations with legislative leadership about how to accomplish this. He stated that he expects these conversations to continue.

“The governor proceeded to announce his executive order taking the first steps towards joining RGGI two weeks later, when the General Assembly is not meeting in voting session.

“This timeline and the Wolf administration’s total lack of transparency shows disrespect and disdain for every duly elected member of the General Assembly representing citizens across the Commonwealth. The administration’s secretive actions and obfuscation should cause anyone to lack confidence in the executive order issued today.

“Gov. Wolf clearly does not have the authority to take this reckless action, which will cost average Pennsylvanians more of their hard-earned money through their energy bills, without legislative approval. His executive order will also cause our Commonwealth and the citizens to lose out on countless business and jobs opportunities to neighboring states that are not a part of RGGI.

“As Majority Chairman, I will continue my fight to hold the Wolf administration accountable by ensuring that state regulations encourage, not discourage, job-creating energy producers, while protecting the health, wealth and safety of all Pennsylvanians.”

Reaction - Groups

The PA Environmental Council issued this statement in response to Gov. Wolf’s announcement--

"Governor Wolf’s proposal to bring Pennsylvania into the Regional Greenhouse Initiative (RGGI), announced today, is the first concrete and meaningful step that the Commonwealth has taken to directly address its role in exacerbating climate change. For that, the Governor is to be congratulated.

“Already including nine - soon to be 11 - northeast states, RGGI offers a market-based approach to reducing emissions that does not pick winners and losers in the energy markets.

“Instead, it allows for all generation to compete, while producing significant returns that would allow the state to mitigate price impacts on residential, commercial, and industrial consumers. It also provides a vehicle to advance further energy efficiencies and innovations.

“Today’s announcement is momentous, but we must recognize this is only the first step in getting Pennsylvania’s energy markets to reflect climate and market realities that are already in play in many other states.

“Upcoming steps, in addition to the state securing its inclusion in RGGI, must also include the progression of the Alternative Energy Portfolio Standard toward a comprehensive Clean Energy Standard that recognizes how all forms of energy and technology can play a role in a fully decarbonized economy for Pennsylvania – a broader commitment every bit as important as the significant step made today.”

Joseph Otis Minott, Esq., Executive Director and Chief Counsel of Clean Air Council, issued the following statement:

“Clean Air Council strongly supports Governor Wolf’s Executive Order on RGGI announced this morning, and we thank him for showing leadership on this critical issue. The administration has considerable and flexible legal authority under the Air Pollution Control Act to take this step, and we applaud the governor for doing so.

“Climate change is an existential threat to us all, and we are already seeing the devastating impacts play out across Pennsylvania each and every day. With one of the dirtiest electric power sectors in the country, Pennsylvania starting down the path of joining RGGI represents real progress in our efforts to achieve Governor Wolf’s emissions reduction goals.

“Our power sector is responsible for over one-third of Pennsylvania’s net greenhouse gas emissions and, for deep decarbonization efforts to work, the electric sector is absolutely key to the process. We have also seen other RGGI states make critical investments in solar, wind, and energy efficiency, while achieving broad-based benefits for their residents.

“We look forward to working with the Wolf administration and all stakeholders as this important rulemaking process moves ahead, achieving similar successes that benefit all Pennsylvanians, especially low-income ratepayers.”

Harry Campbell, PA Executive Director of the Chesapeake Bay Foundation, commended the action taken by Gov. Wolf, saying--

“Greenhouses gases continue to pose significant threats to our personal and economic health, the quality of our local rivers and streams, and to climate stability. Carbon dioxide emissions know no boundaries.

“We commend Governor Wolf’s move toward RGGI, as Pennsylvania will be living up to its responsibility to reduce greenhouse gases in collaboration with neighboring states.

“Due to greenhouse gases and climate change, Pennsylvania is expected to experience higher temperatures, more frequent extreme weather events, and more flooding over the next century.

“As the temperature of our local waters continues to rise, so does the vulnerability of aquatic life like brook trout, the Eastern hellbender, and other animal life.

“As rainstorms become more frequent and more intense, so does the concentration and amount of polluted runoff that enters our rivers and streams. More flooding means more potential for loss of life and property.

“RGGI has a proven track record of reducing CO2 pollution and returning billions of dollars to households and businesses in energy bill savings and direct bill assistance.

“To reduce pollution and combat climate change, CBF is proud to coordinate the Keystone 10 Million Trees Partnership, a collaborative effort determined to add that many trees to the Commonwealth by the end of 2025. Reforestation is one of the accepted RGGI practices for carbon mitigation.

“CBF and farmers are also working together to improve soil health which is another important tool for farm profitability, reducing pollution, and sequestering carbon.

“We look forward to working with Governor Wolf and Pennsylvania legislators to affect real change.”

Josh McNeil, Executive Director of Conservation Voters of Pennsylvania, issued this statement on Gov. Wolf's announcement--

“For centuries, Pennsylvania has been among the world’s worst carbon polluters, but today Governor Wolf took a vital step towards a better future.

"Joining the Regional Greenhouse Gas Initiative (RGGI) will make our Commonwealth cleaner and more prosperous, while offering hope to our kids and grandkids.

"There is still tremendous work to do to implement this plan and miles to go to stave off climate change, but when future generations look back and judge our actions and inaction, today will be a day we can all be proud of.”

The Nature Conservancy-PA issued this statement on Gov. Wolf's initiative--

“Pennsylvania Governor Tom Wolf recently announced that the Commonwealth is moving to join the Regional Greenhouse Gas Initiative (RGGI)—a practical, market-based program that has helped nine other states in the Northeast reduce carbon dioxide (CO2) emissions from power production. We believe this a positive step for Pennsylvania, and are encouraged by the Governor’s action.

“RGGI has proven to be an important tool for participating states, cutting harmful emissions while stimulating investments in clean energy and energy efficiency for homeowners, businesses and local governments, as well as providing benefits to forest conservation.

“Climate change is a fundamental threat to our conservation mission in Pennsylvania. The experience of RGGI suggests it has the potential to deliver significant reductions in CO2, while spurring the Commonwealth’s transition to a vibrant clean energy economy.”

The Environmental Defense Fund's Pam Kiely, Senior Director of Regulatory Strategy, issued this statement on the Governor's action--

“The climate crisis we face requires decisive, concrete action – and today we got that from Governor Wolf. The order he just signed will lead to tangible reductions in Pennsylvania’s climate pollution.

"The regulatory strategy outlined today has delivered strong results across the region for a decade. With this template and the intensifying urgency around climate change, we expect the Governor’s team will be able to act meaningfully early next year.”

Keystone Energy Efficiency Alliance (KEEA) Executive Director Matt Elliott issued the following statement on the announcement to join RGGI--

“KEEA applauds Governor Wolf for taking this bold step for Pennsylvania’s energy future. As a trade association representing nearly 70 companies engaged in the energy efficiency industry, KEEA member businesses stand ready to help meet the goals of the climate policy by helping Pennsylvania businesses and households save on their energy bills with more efficient appliances, buildings, lighting, and more.

“By not participating in RGGI, Pennsylvania has been leaving money on the table and forgoing economic development opportunities for years. But we have to get this right: investing RGGI revenue back into energy efficiency programs for businesses and residents is the only way to save consumers money and grow the economy while maximizing reductions to carbon pollution.

“We look forward to working with Governor Wolf and the Legislature to seize this opportunity and make an historic investment into energy efficiency in Pennsylvania.”

The Nuclear Powers Pennsylvania group representative Tony Robinson, Senior Vice President, Framatome Inc. issued this statement on Gov. Wolf's action--

“Members of our statewide coalition thank Gov. Wolf for his leadership on this critical issue. Pennsylvania is the fourth-largest producer of carbon dioxide emissions in the nation, so joining RGGI is a logical and commendable step for Pennsylvania.

“We further believe this has great potential to properly value the carbon-free benefits of nuclear energy in the Commonwealth and could perhaps be part of the solution that would prevent the premature closure of the Beaver Valley Power Station now scheduled for 2021.”

FirstEnergy Solutions Corp., which owns the Beaver Valley Nuclear Power Plant, said in a statement-- “applauds the actions taken yesterday by Governor Wolf to direct the Commonwealth of Pennsylvania to join the Regional Greenhouse Gas Initiative (RGGI).

“This market-based approach to assigning a cost to carbon emissions in the Commonwealth will eventually play an important role in preserving existing non-emitting and low-emitting generation sources and accelerating the development of additional non-emitting sources.

“We look forward to working with the administration and the general assembly on a near term solution to prevent the premature closure of any of the Commonwealth's remaining nuclear reactors, while the state transitions to RGGI and properly values the state's non-emitting nuclear resources.”

Auditor General’s Climate Report

Also waiting in the wings is Auditor General Eugene DePasquale who in December announced plans to prepare a special report exploring how Pennsylvania is responding to climate change in light of a failure by national leaders to recognize and act on the issue.

Auditor General Eugene DePasquale issued this statement in response to the Governor's executive order--

“By joining RGGI, Pennsylvania is taking responsibility for its role as the nation’s fourth-highest emitter of greenhouse gases. Climate change is already taking a toll on the state’s residents, businesses, farms and infrastructure and is driving up costs to taxpayers.

“I am encouraged to see Governor Wolf taking this bold step to reduce Pennsylvania’s emissions while bringing in a new source of revenue to address our crumbling infrastructure,”

“Governor Wolf’s action indicates that Pennsylvania is ready to take a leadership role on climate action. I’m hopeful that we will continue to see action to reduce our emissions and prepare our communities for the effects of climate change.”

DePasquale said he will release a special report on the fiscal impacts of climate change this fall.

(Photo: The largest coal-fired power plant in Pennsylvania-- Bruce Mansfield-- is closing in November due to competition from natural gas-fired power plants.)