As Pennsylvania approaches the home stretch for joining the Regional Greenhouse Gas Initiative (RGGI), some facts bear repeating.
RGGI is a market-driven tool for helping the entire Commonwealth of Pennsylvania — and especially the communities affected — navigate the transition to a renewable energy economy. Supported by the majority of Pennsylvanians, this cap-and-invest plan would generate hundreds of millions of dollars annually for the state's economy. Those proceeds would provide reliable, ongoing support for energy efficiency programs, workforce development, transitioning energy communities and more.
Indeed, several large energy producers — including Exelon, Royal Dutch Shell and Talen, an operator of Pennsylvania coal-fired power plants — are on the record supporting RGGI because it makes sense economically and provides a pathway for transition.
In October, a Reuters story listed coal plants projected to either close or transition to other fuels by 2030, which predicted four unit closures or switches in Pennsylvania. In fact, five of Pennsylvania’s six remaining large coal plants are now slated to close or convert to natural gas.
Pennsylvania is far from alone in facing these changes and closures. In energy-heavy Ohio, eight coal plants are expected to close or transition to other fuels by 2030. Over 200 coal unit closures, taking place in dozens of states stretching from Pennsylvania to Hawaii, undermine the notion that these changes are tied to state laws or regional compacts — or really anything other than market forces.
In other words, coal-powered electricity generation is going away no matter what. Delay in joining RGGI isn’t stopping this energy transition from happening. But it is keeping us from making the most of RGGI benefits.
RGGI uses simple free-market economics to drive change. Power plants are required to hold a credit (or “allowance”) for each ton of carbon dioxide they emit. An absolute limit on pollution levels is set by “capping” the total number of allowances distributed. These credits are traded on the open market in quarterly auctions, and the proceeds remit back to the state.
While the details of Pennsylvania’s participation in RGGI have yet to be ironed out, RGGI proceeds will be directed to the Department of Environmental Protection (DEP). DEP is currently authorized to use the funds for clean air projects, but proposed legislation would allow the funds to be used for local communities and workers to smooth the state’s energy transition.
Pennsylvania’s economy misses significant investment proceeds with each quarter we don’t participate in this cap-and-invest program. And the longer we wait, the farther we fall behind. On March 9, our neighbor states to both our north and our south participated in another quarterly allowance auction. Pennsylvania missed this auction, and missed the estimated $213 million in investment opportunities that came with it.
$213 million — gone. $213 million that could have created jobs, weatherized homes, trained young Pennsylvanians and supported transitioning coal communities. All from three months of RGGI participation. The scope of this missed opportunity — and the potential to miss similar ones if we further delay RGGI — can’t be understated.
The DEP estimates that RGGI participation will result in hundreds of millions of dollars in investment proceeds per year, year-over-year, and a net increase of 30,000 jobs in the state by 2030.
Despite this clear economic opportunity, vocal opponents in the legislature want to derail Pennsylvania’s participation in RGGI. Conversations in Harrisburg remain stubbornly and myopically focused on dirty energy sources and energy-intensive industries, and it’s holding our state back.
Energy efficiency is the largest energy industry employer in both Pennsylvania and the nation. In other RGGI states, energy efficiency businesses do a sizable portion of the hiring, training and utility-bill cost-cutting that helps their communities enjoy RGGI benefits.
As a trade organization representing this sector in Pennsylvania, the Keystone Energy Efficiency Alliance eagerly awaits the RGGI conversation that really needs to happen: figuring out how to allocate quarterly auction proceeds.
These investments would be transformative for our industry and for Pennsylvania’s economy. They could support energy communities, create healthier and more efficient homes and workplaces, train the next generation of energy efficiency workers and more. As market forces continue to fundamentally change the energy economy in our state and across the country, RGGI represents real, sustained and reliable transition support for Pennsylvanians.
Jeaneen Zappa is the executive director of the Keystone Energy Efficiency Alliance.
First Published: March 26, 2022, 3:30 p.m.
