Industrial Energy Consumers of Pennsylvania
The Voice of Large Energy Consumers In Pennsylvania
News:
IECPA shares General Principles Regarding Energy & Climate Policy that legislators should consider regarding the Governors plan!
Pennsylvania’s governor reveals a climate action plan that would see the state operate a carbon pricing program and make utilities buy half of their power from mostly carbon-free resources by 2035. (Associated Press, Pittsburgh Post-Gazette)
A Pennsylvania lawmaker files a bill to codify the governor’s plan to take the state out of the Regional Greenhouse Gas Initiative and create a cap-and-trade program. (Pittsburgh Business Times)
Shapiro says state will appeal Commonwealth Court’s RGGI decision
Pennsylvania and RGGI – Decision and Resolution
by Barry Naum | Spilman Thomas & Battle, PLLC
On November 1, 2023, the Commonwealth Court of Pennsylvania, in a five-judge panel decision, issued a long-awaited ruling denying the authority of the executive branch, through the Pennsylvania Department of Environmental Protection, to bind Pennsylvania as a member of the Regional Greenhouse Gas Initiative ("RGGI"), colloquially a "carbon cap and trade" program, with current membership from 11 northeast and Mid-Atlantic states.
This represents a critical development on the controversial effort initiated by former Governor Tom Wolf as a capstone environmental initiative of his administration, viewed by advocates and supporters as a potential means to significantly reduce the carbon emissions output of Pennsylvania's electricity producers. Since Governor Wolf's executive order in 2019, RGGI created a firestorm of both support and opposition from numerous stakeholders, with positions often atypically crossing the usual ideological lines. Substantively, critics of RGGI argued the program would result in massive increases in the cost of energy to Pennsylvania consumers and Pennsylvania potentially losing its favorable position as an energy exporter, all at the risk of Pennsylvania jobs and the state's economy.
The Court's decision was based narrowly on the arguments of the litigants of two challenges before it, with plaintiffs represented, respectively, by the state's Senate Republicans and a collection of energy companies, labor unions, and business and industry parties, on the question of whether the executive action to join RGGI appropriately equated to a legitimate fee under the DEP's authority to regulate energy generators under the federal Clean Air Act or an unlawful tax enacted outside of the Governor's constitutional authority. Ultimately, citing in part the excess revenues that would be generated through RGGI by collection from Pennsylvania power producers, the Court agreed with the plaintiffs that the executive action to join RGGI created a tax that, in order to pass constitutional requirements, can only be accomplished through legislation by the Pennsylvania General Assembly.
Although current Governor Josh Shapiro retains the ability to appeal the decision to the Pennsylvania Supreme Court, present indications are that this course of action is unlikely. Rather, it appears that Governor Shapiro is intent on working with his legislative counterparts to pursue an alternative to RGGI, or various alternatives, that will achieve his administration's environmental goals. If so, then the long-running RGGI question, at least in Pennsylvania, is likely resolved.
IECPA Provides Testimony to House Republican Policy Committee on the Rising Energy Cost in Pennsylvania
IECPA members recognize the need to act on climate change, and many of our member companies are implementing their own, individual sustainability programs. At the same time, we need reliable energy that is priced in a way that allows our Pennsylvania operations to grow and successfully compete in the global markets we serve.
Market competition drives innovation and lower energy pricing. Legislation and regulations should not impose unnecessary additional requirements that force a transition to occur faster than the market can react. Such action only results in higher cost and decreased reliability!
IECPA Supports Legal Challenge to the RGGI Tax
In the Commonwealth Court Docket (Bowfin KeyCon Holdings, et al. v. DEP and EQB 247 MD 2022) IECPA reviewed, provided comments, and joined the Amicus Brief filed June 6, 2022, arguing that RGGI's mandate to purchase CO2 allowances constitutes an unlawful tax.
On July 8, Judge Michael H. Wojcik granted the preliminary injunction which temporarily blocks the state from implementing RGGI in Pennsylvania.
IECPA reviewed, provided comments, and joined the Amicus Curiae Brief in Support of Grant of Summary Judgment filed September 23, 2022.
In two of the Supreme Court Dockets (DEP and EQB, Appellants v. LRB 79 MAP 2022 and Bowfin et al. v. DEP and EQB, Appellants 80 MAP 2022) IECPA reviewed, provided comments, and joined the consumer parties' Amicus Brief filed on November 28, 2022, arguing that RGGI's mandate to purchase CO2 allowances constitutes an unlawful tax.
IECPA Sends Legislators Information Regarding RGGI
IECPA - RGGI Information Sheet
IECPA - RGGI Information Sheet 2
IECPA - RGGI States Price of Electricity
RGGI States Electricity Price Increased 1066.7% more than PA between 2009 and 2019 ($2.45/MWh v. $0.21/MWh)
RGGI States average price in 2019: 71.8% higher than PA
PA average price in 2019: 7.4% lower than national average
Source: EIA State Electricity Profiles
Market demand is driving a reduction in carbon emissions from electrical generation. Instead of government implementing costly new regulations like RGGI, we should instead focus on how to eliminate or reduce permitting and regulatory barriers for new low carbon generation development. Government should partner with private investment on R&D and, on the demand / usage side, we should focus on new energy efficiency standards for buildings and equipment. These are paths to a lower carbon future that are much better than a costly RGGI program.
“…For both solar and wind, Collier said, demand for renewable PPAs continues to exceed supply.
"Particularly in some of the most active markets for corporate procurement like PJM, there's still this pervasive imbalance between supply and demand," he said. "Corporate buyers are very aggressively procuring PPAs in places like PJM, and they're doing so because they have mandated or self-imposed clean energy goals, and we are still seeing a shortage of projects able to meet demand."
Much of this imbalance is related to ongoing challenges with permitting and grid interconnection, Collier said. With some jurisdictions actively trying to make these projects more difficult to permit, and others simply falling behind on reviews due to the volume of applications, Collier said permitting and interconnection issues continue to delay projects — some possibly for years — which has in turn driven costs up for developers who pass those costs on to purchases.” 1
1 LevelTen: Renewable PPA prices maintain upward trend as permitting, interconnection bottlenecks delay new projects, Published April 21, 2021 By Emma Penrod
IECPA Sends Letter to the Independent Regulatory Review Commission regarding public interest implications of the DEP's proposed new RGGI regulations - February 10, 2021
IECPA Sends Letters to the Senate Environmental Resources Committee and House Environmental Resources and Energy Committee - January 28, 2021
IECPA Files Comments with Department of Environmental Protection - January 12, 2021
IECPA Provides Testimony to Senate Environmental Resources and Energy Committee regarding RGGI - August 25, 2020
IECPA Submits Written Testimony to Senate Environmental Resources and Energy Committee regarding RGGI - June 19, 2020
IECPA Executive Director Provides Testimony Regarding RGGI - February 5, 2020
What would a $10 per ton carbon price mean for the Northeast?
Adopting a $10 per ton price on carbon could affect the manufacturing sector in states that are part of the Regional Greenhouse Gas Initiative (RGGI), a new report has found — particularly for high-energy industries like cement and aluminum.
At that level, carbon pricing could reduce manufacturing employment by 2.7% in RGGI states, according to the National Bureau of Economic Research paper. Energy-intensive industries, meanwhile, could witness declines in average employment and output of 7.1% and 10.5%, respectively.
IECPA is a trade organization formed in 1982 by large, energy-intensive customers with one or more facilities in the Commonwealth of Pennsylvania. IECPA regularly monitors Public Utility Commission (PUC) activities, participates in the PUC regulatory process, and participates in the legislative process at the General Assembly on matters impacting large energy users.