PITTSBURGH (TNS) — A Pennsylvania court is considering a petition by state Senate Republican leaders to block the Wolf administration from putting fees and a declining cap on carbon dioxide emissions from the state’s coal- and gas-fired power plants.
In a petition for a preliminary injunction filed March 25, the GOP leaders asked the Commonwealth Court to prevent publication of the Wolf administration’s marquee climate change rule until their full case for permanently blocking the rule can be considered.
The petition for an injunction is part of a flurry of legislative and legal activity by Republican opponents of the rule, which would put Pennsylvania — one of the nation’s largest emitters of greenhouse gas pollution — on a mandated pathway toward a cleaner electric grid through 2030 as part of the Regional Greenhouse Gas Initiative (RGGI).
Under its current schedule, the Republican-led Senate has until Monday to attempt to override Gov. Tom Wolf’s veto of a resolution to reject the rule.
If the override attempt fails, the rule could take effect within weeks unless the court grants the injunction.
RGGI is a market-based approach to cutting carbon pollution that requires power plant operators in participating states to buy an allowance for each ton of carbon they emit. The allowances are sold at quarterly auctions and the total number of available allowances shrinks each year, except when new states join the program.
On Tuesday, the Independent Fiscal Office testified at a Senate hearing that recent high auction prices of $13 and $13.50 per ton have altered assumptions that were used by the Department of Environmental Protection to make projections for the program’s short-term costs and revenue.
Current auction prices are 3.8 times higher than the model projected for 2022, which would raise Pennsylvania’s first-year revenue if it joins the program to $781 million, instead of $207 million in the projections, Matthew Knittel, director of the Independent Fiscal Office, said.
If the higher auction prices persist, the carbon rule could also increase residential electricity bills in Pennsylvania this year by 3.8 times the $1.17 per month that the model projected, he said, or $4.47 per month.
Economists from Penn State and the University of Virginia cautioned that, while the recent high auction prices are surprising, they are expected to be temporary and are likely to be reduced by Pennsylvania — a large power generator with the potential to reduce emissions cheaply — joining the market.
”Because of Pennsylvania’s competitive retail electricity market, it is simply not the case that RGGI permit costs will necessarily be passed along to Pennsylvaniaratepayers the same way that they might in states without competitive retail electricity markets,” Seth Blumsack, co-director of Penn State University’s Center for Energy Law and Policy, said in written testimony.
The Department of Environmental Protection has said its current authority limits its uses for the funds to improve air quality, so the revenue would largely be spent on programs to improve energy efficiency and build out energy sources, like solar and wind, that do not release carbon when they generate power. Those programs are expected to bring the cost of power down for all consumers, DEP said.
The rule is opposed by the state’s broad business and manufacturing trade groups, the coal and natural gas industries, the owners of several fossil fuel power plants, as well as the labor unions that build and run them.
It is backed by some natural gas-fired generators, nuclear and renewable energy companies, energy efficiency contractors and environmental groups.
Labor union representatives testified Tuesday that they support an amended version of a House bill that would remove DEP’s authority to implement any measure designed to limit carbon dioxide emissions, including existing programs. In exchange, the amendment provides for a one-time infusion of $250 million from federal COVID-19 relief funds to be spent on carbon capture and hydrogen projects, sewer and water improvements, plugging abandoned oil and gas wells and helping workers and communities affected by power plant closures.
The bill, House Bill 637, is expected to come up for a vote in the House on Wednesday.
In Commonwealth Court, Republican Senate leaders are arguing that the carbon-cutting rule is an “unconstitutional infringement upon the General Assembly’s exclusive authority to make laws, to join interstate compacts, and to levy taxes.”
They said an injunction is necessary to prevent the “irreparable harm” that will result if the rule is allowed to be published.
Because the Wolf administration plans to join the initiative through regulation, a future governor could remove the state from the program through regulation. Wolf’s term ends in January.
