PA Commonwealth Court Blocks State’s Entrance Into RGGI

The Pennsylvania Commonwealth Court on November 1 issued its long-awaited ruling that blocks the state from joining the Regional Greenhouse Gas Initiative (RGGI) in the manner promulgated by the Wolf Administration. RGGI is the cap-and-trade program imposed on the fuels used in electric power generation plants.

Governor Wolf had directed that Pennsylvania would join the multistate program by the regulatory process-and not by an act of the legislature. This effort sparked intense opposition from the coal industry, and the conservative Senate Republican Majority.

At the core of the Court’s ruling is the fact that the PA General Assembly never voted to approve the state joining RGGI. In fact, the Senate and House voted twice to oppose it-but not with enough votes to override the Governor’s veto (read more here).

Governor Wolf had argued he had the power to under the state’s Clear Air Act to join the compact by regulation. However, the Court agreed with the Senate Republicans, coal industry, and unions that because the structure of RGGI resulted in the state receiving a portion of the monies generated by credit process imposed on the obligated process that the regulation is actually a tax. In Pennsylvania law, the legislative action is required in the imposition of a tax.

The money generated by RGGI was estimated to bring in $600 million to the state in the first year. PPA had concerns as to how these funds might be used in the push for electrification infrastructure and incentives.

The focus now is on Governor Shapiro, who expressed concerns about RGGI in his campaign last year. Shapiro has 30 days to decide whether to appeal the Commonwealth Court ruling to the State Supreme Court. National and state environmental groups have begun a vigorous campaign urging the Governor to appeal.

The Pennsylvania legislature is wrapping up the first year of a two-year session. Major energy policy has not been a primary focus of Governor Shapiro and the General Assembly in large part due to the pending RGGI court decision. It is anticipated that the energy debate will ramp up as we enter into 2024.