Pennsylvania DEP says carbon trading will raise electricity costs, lower demand

(The Center Square) – The Pennsylvania Department of Environmental Protection said Monday joining a carbon trading program will raise electricity costs and also lower demand, keeping prices similar for most consumers.

“Rates stay relatively the same in terms of electricity rates because of investment back into the grid, investment back into things like energy efficiency that help mediate the effects of the carbon emissions cap,” said DEP Secretary Patrick McDonnell. “That’s something we have seen in surrounding states.”

McDonnell made the admission during a two hour budget hearing with the House Appropriations Committee that focused most of its time on the Regional Greenhouse Gas Initiative (RGGI) and Gov. Tom Wolf’s insistence on Pennsylvania becoming apart of it.

The 11-state coalition participates in a yearly auction that caps emissions from the power sector. Producers buy credits to cover the pollutants emitted from their facilities, and states reinvest the proceeds into programs that further enhance air quality.

Pennsylvania’s neighbors to the north and south participate in the program, but its been a difficult sell here in the Republican-controlled Legislature, where concerns abound about the impact on the state’s lucrative natural gas industry.

The industry estimates about 300,000 residents credit their job – either directly or indirectly – to the boon of natural gas drilling. The state places that figure far lower, to just over 24,000.

Still, even some Democrats along the state’s western edge worry that RGGI’s auction amounts to little more than a carbon tax that would force an exodus of jobs into nearby Ohio and West Virginia.

House Appropriations Committee Majority Chairman Stan Saylor, R-York, also questioned McDonnell’s logic about demand decreasing through energy efficiency programs.

“I don’t know who you’re kidding, but we have been doing energy efficiency in our schools and our businesses and everything else, and guess what? Demand for electricity has continued to grow across this commonwealth,” he said. “The demand is not going to go down. It’s going to increase … and when you say things like that, that’s where you create the doubt for the people across this commonwealth and this country because you continue to deny what our facts and data proves to be true.”

RGGI supporters say the program will cut 223 million tons of carbon emissions and generate 27,000 news jobs in the clean energy sector – a worthy trade-off to keep Pennsylvania competitive economically. McDonnell said the sector reported a 9% increase in jobs pre-pandemic, an organic growth the state could capitalize on with “some more investment.”

“This is not a question of if, but when we will see a closure of these plants,” McDonnell said. “We have the ability to look forward here and figure out how to diversify.”

The department and GOP members of the General Assembly have been locked in the same argument since Wolf signed an executive order 16 months ago placing the state in RGGI effective 2022. Pennsylvania would be the first state to join without the blessing of its Legislature.

Several DEP advisory boards have also voiced opposition to the order, and last week, the Independent Regulatory Review Commission asked for a one-year pause on the rule-making while businesses adjust their plans to absorb the anticipated impact.

“As we do with all comments, we are evaluating those comments for a response,” McDonnell said. “There’s certainly other comments we’ve received that reached the opposite conclusion.”

McDonnell said the department’s climate assessment work shows increases of 24% in large storm events and 42% in “extremely large storm events.” The state’s temperature will also rise 4 to 8 degrees by 2050, they project.

“That’s not just ‘oh, it’s hotter,’” he said. “That’s heat stress on cows and agriculture and lower quality forage available.”

McDonnell said RGGI remains an important component for addressing greenhouse gas emissions and climate change quickly – and it’s the speed believed necessary of tackling these problems that seem to delineate between those who support the program and those who don’t, he said.

House Appropriations Minority Chairman Matt Bradford, D-Montgomery, accused the majority party of turning a blind eye to climate change at the expense of job creation.

“Sometimes I think this body fails to see that the world around them is changing much quicker than their own ideology allows them to,” he said. “It would seem to me if you want to be pro-job, and if you want to look at the horizon in terms of the ability to compete in a global economy, it would seem to be putting our head in the sand in order to act like events in the world aren’t taking place faster than this legislative body may reflect.”

Saylor bristled at the notion that opposing the way the state is joining RGGI and shrugging off the accelerated closure of fossil fuel plants in the process makes him and other critics indifferent to the environment.

“The governor talks about bipartisanship, but you continue to go on this edict that you can do whatever you want by executive order,” he said. “That doesn’t sound to me like bipartisanship, nor does it sound like a democracy. … It seems to me that there is a continual push to close businesses in Pennsylvania and raise taxes on the people of Pennsylvania. So, all I can say is ‘here we go again.’”

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