Our Perspectives on the Latest Issues
The energy industry across the nation is in transition, a fact that is particularly obvious in Pennsylvania. People once talked of “king coal,” but those days are long gone as new technologies make conventional steam coal plants—once the mainstay of “baseload” power—obsolete and far too expensive.
Politicians like President Donald Trump claim that slashing protections for public health and the environment will bring coal back, but those are nothing but empty campaign promises. Despite an unprecedented number of environmental rollbacks and despite millions of taxpayer dollars wasted on his “coalFirst” initiative, coal generation in Pennsylvania is one third what it was the day the President took office.
Ohio tried a different approach with HB6, a bill which charges ratepayers an extra $50 million per year to subsidize coal generation, guts standards for clean renewable generation, and subsidizes nuclear power. Despite praise from the fossil fuel industry at a recent committee hearing hosted by Pennsylvania state Rep. Daryl Metcalfe, Ohio’s plan is proving to be a spectacular failure. On the very day Rep. Metcalf and his guests were lauding Ohio’s approach, Ohio’s Speaker of the House was arrested by the FBI on racketeering and bribery charges related to the passage of HB6 and a move to repeal the subsidy program is gaining steam.
Far from coal making a comeback, the few remaining large coal plants in Pennsylvania are all near retirement. No one is investing money in new plants to replace them and many of the traditional coal operators are fleeing the business. It’s long past the time that politicians face the facts. Rather than telling lies and making empty promises, they should focus on serious policies to assist the workers and communities that will be impacted when these plants inevitably close.
In addition, our state leadership now faces an additional challenge in helping the state recover from the COVID-19 crisis. As PennFuture recently detailed in a report on the topic, that needs to be a green recovery that does more than just fund traditional polluting sources and hoping benefits trickle down.
There is a real plan to move Pennsylvania Forward
Senator Costa and a number of co-sponsors have just introduced “The Energy Transition and Recovery Act” (SB15) that, if passed, would help guide the Commonwealth through the coming energy transition and support our workers and communities as we cut carbon emissions and other harmful pollution.
Senate Bill 15 recognizes that while Governor Wolf has the authority to create a RGGI program on his own though the Department of Environmental Protection (DEP), the legislature could work with the Governor to make that program more flexible and make a difference for workers and communities.
RGGI is a market-based program that works by creating a cap on carbon pollution from the electric generation industry. Each ton of allowable emissions under that cap is represented by a single allowance. Facilities can take action to lower their emissions, but if they are going to pollute they need to purchase sufficient allowances at auction. The price of those allowances is set by the market and the proceeds come back to Pennsylvania to be invested in various ways.
DEP is currently developing a RGGI program using the authority granted by the Air Pollution Control Act. Once that program becomes operational, the proceeds from the auction will be deposited into the Clean Air Fund and can be used to support the program itself or be invested in ways that reduce air pollution. That alone can do a lot of good, generating over $2 billion over the first decade of the program, but with the assistance of the Legislature the program could be much more flexible in how the proceeds are used.
Particularly, it is important to provide support to workers and communities that will be impacted by the transition away from coal which is already happening regardless of RGGI. The right thing to do is help communities move away from a reliance on the dying coal industry and toward more prosperous economic activities, including modernizing their skill sets to be compatible with our 21st century economy and incentivizing new industries with long-term growth potential.
The DEP would implement the RGGI program in the same way, but investments of the net proceeds under SB15 would be guided by an energy transition plan. A quarter of the proceeds would still go to the Clean Air Fund, but the remainder would go into a newly created Energy Transition Fund and used for certain types of projects in key categories:
35% – Programs to support workers and communities
15% – Bill assistance for low-income customers
20% – Weatherization assistance programs
30% – Solar generation, energy efficiency, and energy demand reduction
While the legislation specifies the categories for funding and the broad goals of the program, the details of what projects are funded and where community support would be prioritized would be guided by an Energy Transition Plan. This plan will be developed by the state agencies involved in transition planning after an extensive public participation process that includes hearings in impacted communities and fossil fuel producing regions of the commonwealth.
The plan must also be approved by a board consisting of agency members, legislative appointees, and representatives of environmental justice areas, labor groups, clean energy companies, energy consuming industries, and others.
With this bill, Pennsylvania will be an innovator
All the existing RGGI states make investments in energy efficiency, and most also invest in renewable energy and energy bill assistance as well. That has proven to be a success. A recent independent report found that in the first 10 years of the program those investments returned over $5.4 billion in net benefits resulting from $3.2 billion in revenue generated by the RGGI program, producing 1.78 times the benefits compared to the monies invested.
While many of the programs deployed by RGGI states contain implicit job-creation benefits, especially in the areas of renewable energy development and weatherization, the SB15 plan builds on this foundation but goes even further by investing in education, outreach, and job training. Other RGGI states spend an average of just 2 percent on those areas, where this bill would devote 26.25 percent of total proceeds to these efforts. This bill also requires that, in making those investment decisions, the state seek meaningful input and consultation from environmental justice communities as well as labor groups.
This recognition that environmental justice is a key issue for any successful plan is part of a growing trend across states. New Jersey, Maryland, and New York have already taken steps in that direction, but Pennsylvania has the opportunity to show real leadership.
The conventional wisdom may be that the politics of the Pennsylvania Legislature and opposition from fossil-fuel interests will keep SB15 from getting any traction. If so, that will be a big loss for our workers and communities. We have an opportunity to innovate and grow a sustainable economy that will not only help our current recovery, it will keep Pennsylvania an energy leader in the future.