The future of Governor Tom Wolf’s signature climate program is in the hands of Commonwealth Court.
The court heard arguments in two cases Wednesday on whether the Regional Greenhouse Gas Initiative is constitutional.
Attorneys for industry groups and Republican state lawmakers, who oppose Pennsylvania joining RGGI, said it is an unconstitutional tax on power plants by the executive branch.
They said the Department of Environmental Protection doesn’t have the authority to join the program under state law, and they say DEP didn’t go through the regulatory process the right way, because public hearings were held virtually instead of in person.
Also on Wednesday, during a news conference announcing the start of his transition, Democratic Governor-elect Josh Shapiro said he plans to convene a working group to bring together people from all sides of the issue to find consensus on policy that would address climate change but not raise energy prices or put anyone out of work. He has not committed to joining or staying in RGGI.
Clean Air Council has filed a brief supporting the state’s entry into RGGI. Robert Routh, a public policy and regulatory attorney with the council, said opponents were focused on the program’s “sticker shock.”
“They want to put in the court’s mind that – doesn’t this seem like a big deal? The adjective ‘Herculean’ was used a few times,” Routh said.
Anthony Holtzman, an attorney with K&L Gates representing the coal and power plants groups, said the RGGI rule is designed to move the state’s electric generators away from fossil fuels at a great cost to power plant owners and ratepayers across Pennsylvania.
“We have a rulemaking that’s going to have the effect, if it were to go into effect, of fundamentally restructuring the electricity generation sector in the commonwealth,” Holtzman said.
The DEP said the money plants have to pay for pollution is a fee–not a tax–and that it has authority under the state’s Air Pollution Control Act. The law does not specify that public hearings must be in person.
Under RGGI, power plants have to pay for each ton of carbon emissions they produce. An estimate from the Independent Fiscal Office shows revenue could be nearly $800 million per year, if prices for carbon allowances remain around $13 each.
Matthew White, an attorney for DEP, said money raised from RGGI is not a tax because the money cannot be put toward general government uses.
“The fees in this case are to fulfill the regulation to produce a tangible result in air pollution control measures,” White said. “The proceeds to be generated are going to be spent for a big problem. The big problem is air pollution and carbon dioxide emissions in this commonwealth.”
White said RGGI is a cap-and-invest program with a goal to reduce emissions by 97 million-225 million tons. He said the cap would not be able to meet the goal alone–that investments are needed.
Under Pennsylvania’s regulation to join RGGI, money raised will go to the Clean Air Fund, where it can only be used to reduce air pollution. Possible initiatives include energy efficiency and clean energy programs.
The legislature could reallocate the money. Democratic lawmakers have offered a plan that would send money to communities where plants close and areas that experience a higher pollution burden, but the legislation has not gotten any traction so far.
Commonwealth Court does not have a deadline to rule in these cases.
Appeals on other aspects of the cases are also pending in the state Supreme Court.
Observers expect that whatever opinion the Commonwealth Court hands down will be appealed to the high court, as well.
This story is produced in partnership with StateImpact Pennsylvania, a collaboration among WESA, The Allegheny Front, WITF and WHYY.
