Published by Marcellus Drilling News. 11.27.23

Last Wednesday, before heading out the door for the Thanksgiving holiday, MDN brought you the sad (but not unsurprising) news that Pennsylvania Gov. Josh Shapiro had decided to appeal a Commonwealth Court decision striking down his predecessor’s attempt to force the state to implement a multi-billion-dollar carbon tax, called the Regional Greenhouse Gas Initiative. As we told you in that post, several Big Green groups immediately posted love letters of support. The case now goes to the PA Supreme Court, which is packed with Democrats. However, the PA Senate, controlled by Republicans and a growing list of energy groups, will make the case before the Supremes that the RGGI carbon tax should be dead once and for all.

We have several stories to share about our side lining up to fight Shapiro at the Supreme Court. The first is from the Pittsburgh Business Times:

Several industry groups, including the PA Power Alliance and the PA Coal Alliance, joined Senate Republicans in criticizing Gov. Josh Shapiro’s decision to appeal a Commonwealth Court decision barring Pennsylvania from joining the Regional Greenhouse Gas Initiative.

A Nov. 1 decision by the Commonwealth Court found Pennsylvania’s attempts, started as an executive order by then-Gov. Tom Wolf in 2019, were unconstitutional due to omitting legislative approval. Shapiro, in a statement Tuesday, said he would appeal the decision but framed it more in as an issue of executive power and not RGGI-specific.

The Power PA Jobs Alliance, which includes fossil-fuel companies, unions and others, said Shapiro’s appeal “ultimately punts the outcome of the RGGI carbon tax to a gridlocked General Assembly, (and) does nothing to address the ongoing financial and emotional concerns over RGGI from impacted workers and ratepayers struggling to make ends meet in an increasingly uncertain economy.”

RGGI is a multi-state initiative that puts a price on carbon emissions from power plants, requiring them to pay more than others and then the proceeds would be spent by the state on environmental-related initiatives. But industry groups and the fossil fuel industry say it’s a tax that is designed to put power plants out of business and workers out of jobs. Critics have pointed to the closing of several power plants, including the Homer City Generation plant in Indiana County earlier this year and the Cheswick power plant in Allegheny County two years ago, as examples of RGGI’s economic impact.

Rachel Gleason, executive director of the Pennsylvania Coal Alliance that had filed an application for summary relief along with GenOn Holdings and the United Mine Workers of America, among others, called RGGI a misguided policy.

“The RGGI regulation is a multibilliondollar tax scheme, and the governor does not have the unilateral authority to assess billions of dollars in taxes on Pennsylvania residents, consumers and businesses,” Gleason said.

State Senate Majority Leader Kim Ward, R-Westmoreland, called Shapiro’s decision “a maneuver to avoid having to make a tough decision.”

“The truth is, Gov. Shapiro would rather unnecessarily tax Pennsylvanians and make them feel virtuous about raising their electricity rates and eliminate good-paying jobs than face the traditional factions in his own Democratic Party,” Ward said.

In a statement Tuesday, Shapiro spokesman Manuel Bonder said the governor was willing to sign legislation that would provide a Pennsylvania- or PJM-based RGGI alternative.

Environmental groups, on the other hand, praised Shapiro’s decision.

“Gov. Shapiro stood up for the health, safety and futures of all Pennsylvanians by defending the most important climate protection policy in our state’s history,” said Tom Schuster, Pennsylvania chapter director of the Sierra Club. “Every Pennsylvanian deserves clean air and water, affordable utility bills, a future that is not threatened by the climate crisis, and a state Legislature that will act in their best interest.”

Another group, Conservation Voters of Pennsylvania, also praised Shapiro’s decision.

“In pursuing this appeal, the governor is acting in the spirit of our state Constitution’s Environmental Rights Amendment, which highlights Pennsylvanians’ rights to ‘clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment,” the group said. (1)

From the Pennsylvania Business Report:

Pennsylvania GOP lawmakers and a coalition of labor, management and consumers have denounced Democratic Gov. Josh Shapiro’s plans to appeal a recent state appellate court ruling pulling the commonwealth out of the Regional Greenhouse Gas Initiative (RGGI) program.

Just a few days before the 30-day deadline expires, Shapiro on Tuesday said his administration will appeal the Commonwealth Court’s Nov. 1 ruling that prevents Pennsylvania from participating in RGGI, a cap-and-trade program intended to cut carbon emissions from the power sector.

The governor ‘s spokesperson, Manuel Bonder, said in a statement issued yesterday, that the administration must appeal the court’s ruling because the opinion was based on a question of authority.

“The Commonwealth Court’s decision on RGGI — put in place by the prior administration — was limited to questions of executive authority, and our administration must appeal in order to protect that important authority for this administration and all future governors,” Bonder stated.

Meanwhile, Shapiro has never committed to the RGGI program and wants lawmakers to work with him on a RGGI alternative.

“The governor stands ready and willing to implement the recommendations of the RGGI Working Group — and he would sign legislation replacing RGGI with a Pennsylvania-based or PJM-wide cap-and-invest program, as they proposed,” according to Bonder’s statement. “Should legislative leaders choose to engage in constructive dialogue, the governor is confident we can agree on a stronger alternative to RGGI.

“If they take their ball and go home, they will be making a choice not to advance common-sense energy policy that protects jobs, the environment, and consumers in Pennsylvania,” Bonder added.

Shapiro’s office urged Republican and Democratic leadership to join the governor “at the productive table [he] has set with labor, environmental advocates, energy producers, and consumer advocates” to advance forward-looking energy policy.

“Now is the time for action, inaction is not an acceptable alternative,” Bonder said.

But supporters of the Commonwealth Court’s ruling may be hard pressed to sit at that negotiating table.

“As I have said since January, Gov. Shapiro had the ability to rescind the $600 million RGGI energy tax, but he chose not to,” said Pennsylvania House Republican Appropriations Chairman Seth Grove (R-196). “This cap-and-trade RGGI tax scheme will result in job losses in Pennsylvania while at the same time raising the price of energy. It’s a lose/lose for Pennsylvania.”

Grove also expressed frustration with Shapiro’s nearly year-long delay on making a final decision on RGGI participation, including what he says was a secretive working group that never reached a conclusion on how to move forward.

“Shapiro’s own working group didn’t approve RGGI, but he has now made it clear, he plans to continue Gov. Wolf’s disastrous plan putting Pennsylvania’s energy exporter status in jeopardy,” said Grove.

Pennsylvania Senate Majority Leader Joe Pittman (R-41) agreed, saying Shapiro has decided to carry “the failed mantle of his predecessor and appeal the decision to the Supreme Court.”

“Gov. Shapiro’s action further places family-sustaining jobs at risk and stymies the ability for any meaningful conversations on energy and environmental policy in the Pennsylvania legislature,” said Pittman. “The governor should be standing with working families who are struggling with inflationary costs and pressures from higher electric bills.”

The Commonwealth Court ruled specifically that the multi-state initiative to limit carbon emissions violates the state Constitution and that money raised through RGGI is an invalid tax.

“Ignoring the needs of Pennsylvanians while simultaneously trying to circumvent the constitution is a reckless and irresponsible approach,” Pittman added.

The PowerPA Jobs Alliance, a coalition of labor, management and consumers opposed to state carbon taxes on electric generation, manufacturing and motor fuels, also railed against Shapiro’s appeal for the same reasons.

“On the Tuesday before Thanksgiving, and in conflict with many of his pre- and post-election public statements and assurances, the governor has effectively adopted as his own anti-worker, anti-family energy policy, mimicking that of his predecessor,” tweeted PowerPA Jobs on X, formerly Twitter.

The alliance went on to say that Shapiro’s “troubling decision, which ultimately punts the outcome of the RGGI carbon tax to a gridlocked General Assembly,” does not address the ongoing financial and emotional concerns over RGGI from impacted workers and ratepayers struggling to make ends meet.

The implications of Shapiro’s appeal involves a choice of whether to side with the radical energy policy agenda or the interests of impacted workers and ratepayers, the group added.

“Taxpayers will continue to bear the tremendous costs of this litigation and Pennsylvania’s workers and families will have to continue to live with the uncertainty surrounding the ongoing, existential threat of the RGGI carbon tax,” PowerPA Jobs tweeted.

The Pennsylvania Coal Alliance is disappointed in the Shapiro administration’s decision to appeal, according to Executive Director Rachel Gleason.

“The governor claims he is willing to implement the recommendations of his RGGI Working Group, yet they never endorsed RGGI nor was a broad policy consensus reached,” she said. “While major energy policy should be determined by the General Assembly, embracing an illegal energy rulemaking that the court has deemed an unconstitutional tax with today’s appeal is not the General Assembly’s call.”

Moving forward, Grove offered an alternative plan for Shapiro to consider: “Keep taxes on energy producers low and keep taxes on energy consumers lower; if he can’t agree to this we know where his priorities lie.”

Pittman said he is hopeful the Supreme Court will quickly resolve the RGGI matter.

“We will not negotiate environmental and energy policy with the anvil of RGGI hanging over the heads of Pennsylvanians,” said Pittman. “The responsible enactment of energy policies which balance development of our God-given natural resources with environmental needs continues to be our focus.”

Environmental groups, including the Natural Resource Defense Council (NRDC) and Conservation Voters of Pennsylvania, reportedly urged Shapiro to appeal the Commonwealth Court’s ruling, which the NRDC called “misguided.” (2)//

Finally, the Pennsylvania Independent Oil & Gas Association (PIOGA) issued this statement to say it will join the fight against RGGI before the Supremes:

The Pennsylvania Independent Oil & Gas Association (PIOGA) issued the following statement regarding Governor Shapiro’s recent decision to appeal Commonwealth Court’s RGGI decision:

“Governor Shapiro’s decision to appeal a 4-1 Commonwealth Court ruling to affirm the Pennsylvania Legislature’s role in enacting state taxes is extremely unfortunate and ill-advised. The effort to unilaterally join the Regional Greenhouse Gas Initiative now spans more than four years, during which there were multiple determinations that the development of tax policy such as joining RGGI requires the authorization of the state House and Senate. The Governor’s position that he supports the recommendations of his RGGI Working Group in the form of some type of “RGGI Lite” ignores the fact that the group did not endorse RGGI and did not agree on a policy framework to establish any type of carbon tax in the state. Such a program would cost Pennsylvanians billions of dollars in taxes, put our power grid at risk and impact thousands of hard-working residents of the Commonwealth, without benefiting our environment. This has always been an unconstitutional power grab by the executive branch, and PIOGA will join a broad-based coalition of businesses, labor unions, energy producers and taxpayers’ rights organizations to oppose this scheme before the State Supreme Court.” (3)

(1) Pittsburgh (PA) Business Times (Nov 22, 2023) – Industry groups criticize Shapiro’s decision to appeal RGGI case

Link to full article: Energy Groups Gear Up to Oppose Shapiro’s Appeal of Carbon Tax | Marcellus Drilling News