HARRISBURG — Virginia Gov. Glenn Youngkin signed an executive order on his first day in office this month yanking his state out of the Regional Greenhouse Gas Initiative (RGGI) because of the real, and devastating, effect it will have on low-income households.
Virginia spent $46 million in 2019 helping 100,000 residents cover their energy costs. Last year, the state’s utilities spent $227 million buying credits at the RGGI auction to offset the carbon emissions they generate.
That’s double what proponents of the program said it would cost and it will be ratepayers, almost exclusively, who will foot this bill. For those living at or below the poverty line, this de facto tax hits the hardest.
This is the reality facing Pennsylvania. Everything we’ve been promised about RGGI since Gov. Tom Wolf signed the 2019 executive order committing us to the program has changed, for the worse. The clearing price of credits sold at auction has quadrupled. The purported emissions reductions have been all but erased, based on analysis from our 13-state grid operator PJM, who notes that nothing RGGI does will stop carbon pollution from non-participating regions “leaking” into the air we breathe day in and day out.
But it gets worse. The problem with Wolf’s executive fiat is that it strips the state Department of Environmental Protection of any power to provide direct bill assistance to Pennsylvania’s neediest residents.
At least in Virginia, the proceeds of the RGGI auctions could be diverted to help offset increased utility rates. That’s because state lawmakers crafted and adopted legislation authorizing the program and dictating the use of its profits. Pennsylvanians, however, are not so fortunate.
According to Penn State’s Center for Energy and Law Policy, without legislative intervention, the agency “has no means of subsidizing ratepayers,” even as the other 12 RGGI states spend up to 16% of auction proceeds on direct bill assistance. Hayley Book, former senior adviser on energy and climate at the state’s environmental agency, in a July 2020 interview with Bloomberg Law, confirmed DEP’s lack of authority to provide rebates and energy discounts.
The Pennsylvania Public Utility Commission says that low-income households, even after receiving subsidies through programs like the Low Income Home Energy Assistance Program (LIHEAP), pay almost 15% of their paycheck toward heating and electricity.
The federal program helps one in five Americans pay their utility bills, including more than 303,000 households in Pennsylvania last year alone. These same residents will see rates increase between 12% and 18% should RGGI’s regressive tax takes effect later this year.
This also doesn’t account for the volatility in prices that will occur when coal and gas plants shutter prematurely, shrinking the supply of reliable and affordable electricity and sending tens of thousands of jobs elsewhere.
So why are we still pretending that RGGI is the right choice for us?
Pennsylvania emissions have been reduced by 38% since 2006 without RGGI – more than all the 12 participating states combined. Moreover, our electricity rates come in 30% to 60% lower than those in RGGI states.
In fact, eight RGGI states fall among the top 10 most expensive electricity rates in the nation, including the four highest ranking – Connecticut, Rhode Island, Massachusetts and New Hampshire. Just how does joining this group benefit Pennsylvania?
Without Pennsylvania’s robust natural gas industry, the RGGI states would struggle to achieve their purported air quality benefits. In fact, New York City reduced its emissions 23%, from 2006 levels, thanks to clean-burning natural gas produced right here. So why does the administration want to fix what isn’t broken?
It’s no wonder the DEP refused the Senate Environmental Resources and Energy Committee’s invitation to testify about the skyrocketing cost of RGGI. The shoddy analysis the administration spent $400,000 to develop has crumbled before our very eyes, leaving behind the cold hard truth: this is a regressive tax on the poorest households in Pennsylvania.
I wouldn’t be caught defending it, either.
Senator Gene Yaw was elected to represent the 23rd Senatorial District consisting of Bradford, Lycoming, Sullivan, Union Counties and a portion of Susquehanna County. He serves as Chairman of the Senate Environmental Resources and Energy Committee.
CONTACT: Nick Troutman, Chief of Staff, 717-787-3280