GOP senators vow to reject any PUC nominees until Wolf withdraws RGGI executive order

The following appears in the May 2021 issue of The PIOGA Press.

Senate Republicans have told Governor Tom Wolf they will block appointments to the Pennsylvania Public Utility Commission (PUC) unless he ends his unilateral effort to join a multistate climate initiative to cut carbon dioxide emissions from power plants.

The Republicans, who object to the Democratic governor’s move to join the Regional Greenhouse Gas Initiative (RGGI), said in a letter to Wolf on April 21 that they will reject his PUC nominations until he withdraws his executive order directing the Department of Environmental Protection to put in place rules enabling Pennsylvania to participate in the CO2 cap-and-trade program.

“We do not take this position lightly,” said the letter signed by all 27 GOP senators along with Senator John Yudichak, an Independent from Luzerne County who caucuses with the Republicans.

Here’s the text of the Senate letter:

Governor Wolf,

We are writing to you with regard to your recent appointment to the Pennsylvania Public Utilities Commission (PUC). A s you are aware, the Senate of Pennsylvania is currently reaching the deadline to approve or deny your recent appointment. Confirmation of gubernatorial appointments is a constitutional duty we take very seriously. With regard to this specific appointment, the Senate Majority has serious issues with your recent actions related to the Regional Greenhouse Gas Initiative (RGGI).

The Constitution of Pennsylvania is more than just words on a page to all of us. We consider it the operations manual for the entire Commonwealth. Three co-equal branches of government are the foundation to both equal representation and check and balances, that have faithfully served Pennsylvanians since our inclusion into the Union in 1787.

For months, the General Assembly has been expressing concern regarding your excessive use of executive orders and the rulemaking process to achieve substantial policy changes rather than vetting them through the legislative process set forth in the Constitution.

In our view , one of the most brazen executive actions was your unilateral inclusion of Pennsylvania into RGGI without legislative approval. The Independent Regulatory Review Commission (IRRC) even went as far to call for a one-year moratorium on your act ions and questioned what authority you possess to enter into this  pact without legislation. To that point, the Commonwealth entered into other multi-state agreements, such as the Chesapeake Bay Commission , the Delaware River Basin Commission and the Susquehanna River Basin Compact only after the General Assembly passed authorizing legislation that the Governor signed into law.

 Further, three Department of Environmental Protection (DEP) advisory panels have rejected the proposal, yet the Environmental Quality Board (EQB) still processed with developing regulations associated with RGGI. It is our understanding that the EQB plans to advance these regulations this summer, despite a clear constitutional requirement for involvement by the General Assembly.

In lieu of this subversion of the constitutional process, and short of arguing this in a judicial setting, we are presented with very few options to reinstitute proper checks and balances in this particular situation. Therefore, we will be exercising our legislative authority to reject all future PUC nominees until you withdraw your executive order related to Pennsylvania’s inclusion in RGGI.

We do not take this position lightly. The PUC has significant oversight in energy and rate regulation, and they have already actively participated with the EQB by engaging PJM Interconnection “to promote the integration of this program in a manner that preserves orderly and competitive economic dispatch within PJM and minimizes leakage.”

If you believe that RGGI has value to the Commonwealth, then you should be confident to have it vetted properly through the legislative process. The current path to circumvent this process betrays both proper representation of our citizens, and any merit to this program that you may think exists. We are willing to participate in discussing this program through our committees and on our legislative floor, but we will not sit idly by and watch you ignore the foundations that built this state.

Thank you for your time and consideration in this matter. We are available to engage further on this issue if you so choose; however, until we can reach any agreement with your removal of Pennsylvania from RGGI and submit the compact for deliberation through the General Assembly, we will not be confirming any PUC nominees.

The move is significant because two seats held by Democrats on the five-member commission have expired, and without new appointments, control of the PUC will flip to a 2-1 Republican majority soon. The commission has significant influence over the Commonwealth’s energy policy.

A Wolf spokesperson denounced the Republican threat to hold PUC appointments “hostage” as a “reckless precedent,” and said Wolf will not pull back on his efforts to enter RGGI.

The governor in 2019 signed an executive order to join the regional market-based program to reduce greenhouse gases from electric generation, a system that rewards power plants that emit little or no carbon dioxide and penalizes fossil-fuel generators. Eleven other states have joined RGGI—Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont and Virginia.

The plan would impose limits on greenhouse gas emissions that tighten each year, requiring power plants that emit carbon dioxide to pay increasingly higher prices for emissions allowances.

The administration continues to have the RGGI regulations on a fast track. DEP posted the final-form rule on its website in early May, ahead of consideration this month by the Air Quality Technical Advisory Committee and the Citizens Advisory Council. DEP is scheduled to present the final regulation to the Environmental Quality Board for action in July.

In addition to representing a $500 million tax on Pennsylvanians, the GOP cites studies that predict there will be little reduction in overall emissions. Power generation will move to more competitive fossil-fuel plants in other states not affected by the emissions caps, a migration of emissions known as “leakage” and referenced in the April 21 Senate letter.

The senators and others contend that Wolf should get the consent of the General Assembly to join any multistate agreement. Wolf last year vetoed legislation that would force a legislative vote on joining the initiative. The legislation was reintroduced this session as Senate Bill 119 (along with a companion House version). On April 27 SB 119 won the approval of the Senate Environmental Resources and Energy Committee on a party-line vote (see accompanying article).

The PUC’s current vacancies began last year when Commissioner Andrew Place, a Democrat, resigned at the end of his term. Wolf nominated Hayley Book, a senior adviser on energy and climate at the DEP who has been Wolf’s RGGI point person, to fill the vacancy in August. The Senate did not act on the nomination during last year’s session, and Wolf resubmitted Book’s name in January.

A second five-year term, now held by Vice Chairman David Sweet, another Democrat, expired on April 1. Wolf has not reappointed Sweet or nominated a replacement. Under state law, Sweet can remain in the seat for up to six months after his term expires if a successor has not been appointed by the Senate.

Wolf withdraws cabinet nominations

At the beginning of May, the governor withdrew the nominations of seven of his cabinet members in reaction to the Senate ultimatum over PUC nominations. A spokesperson for Wolf said the acting officials could continue to do their jobs without Senate confirmation.

“At this time, the governor has withdrawn several of his nominations because the Wolf administration will not let its cabinet officials be held hostage by the Senate Republicans’ insistence to halt progress on policy issues that are important to Pennsylvania’s citizens. The individuals will continue to serve in an acting capacity. The title of ‘acting’ does not impact their ability to do the job in any way,” said Lyndsay Kensinger, a spokeswoman for the governor.

Among the cabinet-level positions involved were adjutant general, secretary of state, secretary of education, secretary of labor, secretary of human services, secretary of health and physician general.

RGGI and COGA bills receive committee approval

A bill blocking the Wolf administration from joining the Regional Greenhouse Gas Initiative without legislative approval and another measure establishing a separate regulatory program for the conventional oil and gas industry have both advanced from committee in the General Assembly.

On April 27, the Senate Environmental Resources and Energy Committee reported out Senate Bill 119 (Pittman, R-Indiana), prohibiting the Department of Environmental Protection from enacting regulations joining the Regional Greenhouse Gas Initiative (RGGI―or any similar pact—without specific legislative approval.

“A carbon tax is a major energy and fiscal policy initiative, and if such a tax is to be imposed on Pennsylvania employers, we believe it should be approved by the General Assembly,” Senator Joe Pittman, the committee’s vice chairman, said after the vote. “Beyond the fiscal impact on Pennsylvania manufacturers, coal and gas electric generation, consumers, and future economic investments made in our state, it also creates serious constitutional questions of checks and balances between co-equal branches of government.”

The committee’s majority chair, Senator Gene Yaw (R-Lycoming), observed, “If Pennsylvania joins RGGI, it would be the only major energy-producing state in the compact and the resulting carbon tax on employers engaged in electric generation would devastate that industry and cost thousands of jobs.”

The approval of SB 119 came on a party-line vote of seven Republicans in favor and four Democrats against. The bill now moves to the full Senate for consideration. A companion House version, HB 637 (Struzzi, R-Indiana) has not been brought up yet for consideration. SB 119 mirrors the language of SB 950 and HB 2025 that were introduced during the last legislative session. The governor vetoed HB 2025—which had received bipartisan support in both chambers—last September (October 2020 PIOGA Press, page 1).

Conventional Oil and Gas Act

On May 4, the House Environmental Resources and Energy Committee approved HB 1144 (Causer, R-McKean), which would create the Conventional Oil and Gas Act (COGA), a regulatory scheme separate from the Oil and Gas Act of 2012, which was written to address the shale-gas industry as it began to ramp up in Pennsylvania.

The bill was reported out on a near-party-line 16-9 vote, with Representative Pam Snyder (D-Greene) joining the committee’s Republicans to advance the bill to the House floor.

“This bill is something that this committee has worked on for many, many years,” Representative Martin Causer, the bill’s prime sponsor, said during the committee hearing. “(It is) certainly something that I think is very important.”

Representative Daryl Metcalfe (R-Butler), the majority chair of the committee, said the bill “provides safety that we need” for the environment and communities while also “ensuring small business owners are able to continue operations.”

Last session, the General Assembly approved COGA legislation (SB 790), only to have it vetoed by Governor Wolf in November (December PIOGA Press, page 1). The minority chairman of the House Environmental Resources and Energy Committee, Greg Vitali (D-Chester), commented during the May 4 session that the Wolf administration would prefer to reach agreement with industry over the Chapter 78 regulatory package which is now in draft form (Environmental Protection Standards and Waste Management).

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