House, Senate Members To Introduce Bills To Protect Coal-Fired Power Plants From Carbon Tax

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).

"Since Pennsylvania deregulated its electricity market, 19 coal-fired electric generating units (EGUs) have or are in the process of closing or converting. If Pennsylvania were to adopt a carbon tax, such as that imposed by joining the Regional Greenhouse Gas Initiative (RGGI), the remaining coal-fired EGUs would be forced to pay hundreds of millions in additional taxes and, as a result, will shut down.

"This would lead to the direct elimination of thousands of family sustaining jobs in those communities, not to mention the loss of millions in local and state tax revenues. It would also have significant negative economic consequences regionally as these coal-fired EGUs consume nearly one-fifth of Pennsylvania’s bituminous coal production, an industry that provides $6.91 billion in total economic output to Pennsylvania.

"In addition to triggering the closure of coal-fired EGU’s, joining RGGI or implementing any other form of a carbon tax would also lead to the closure of every coal refuse-fired EGU. The coal refuse reclamation to energy industry provides significant environmental benefits long recognized by this General Assembly and contributes $615 million annually to our state’s economy.

"Ultimately, with the loss of Pennsylvania’s coal and coal refuse EGUs - nearly one-quarter of our total electric generation capacity - the burden of a carbon tax on power generation would be borne exclusively by Pennsylvania’s natural gas-fired EGUs. 

“Consequently, under the levy of a carbon tax, natural gas-fired EGUs in the Commonwealth would be at a competitive disadvantage against plants in neighboring states that do not impose such a tax, and capital investments in natural gas electric generation would be diverted to those states.

“A carbon tax is a major energy and fiscal policy initiative, and if such a tax is to be imposed on Pennsylvania industries, we believe it must emanate from the General Assembly. 

“In addition to the fiscal impact on Pennsylvania manufacturers, coal and gas electric generation, consumers, and future economic investments made in our state, this also implicates serious constitutional principles of checks and balances that merit a strong, bipartisan response from the Legislative Branch.

“In an effort to support the authority of the General Assembly on this issue, we will be introducing legislation in the near future that delineates the process for legislative approval before Pennsylvania could impose a carbon tax on employers engaged in electric generation, manufacturing or other industries operating in the Commonwealth, or enter into any multi-state program, such as RGGI, that would impose such a tax.

“Any carbon tax will ultimately be paid for by Pennsylvania residents and businesses. Given Pennsylvania is already ahead of the carbon dioxide reduction goals established under Governor Wolf’s Climate Action Plan, why would we want to jeopardize thousands of Pennsylvania jobs and trigger significant higher electricity rate increases when the existing competitive market has already achieved these gains?”

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

[Editor’s Note: 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.]

(Photo: Bruce Mansfield coal-fired power plant in Beaver County.  The largest coal-fired power plant in Pennsylvania, is due to close in November as a result of competition from natural gas.)