This story was updated 4:20 p.m. Commonwealth Court is stopping Pennsylvania’s effort to join a cap-and-trade program targeting power plant emissions.
Joining the Regional Greenhouse Gas Initiative was Gov. Tom Wolf’s signature climate policy. Under RGGI, power plants must pay for each ton of carbon dioxide they emit. The move would have made Pennsylvania the first major fossil fuel-producing state to put a price on carbon.
In an opinion filed Wednesday, Commonwealth Court ruled that money raised through RGGI is an invalid tax. A five-judge panel heard the case. Judge Michael Wojcik wrote the opinion striking down RGGI. Judge Ellen Ceisler wrote a dissenting opinion.
The court sided with state Republican Senators who claimed the Department of Environmental Protection did not have the constitutional authority to collect revenue from the program, and that only the legislature can levy taxes.
Senate intervenors in the case were then-President Pro Tempore of the State Senate Jake Corman (R-Centre), Senate Majority Leader Kim Ward (R-Westmoreland), Chair of the Senate Environmental Resources and Energy Committee Gene Yaw (R-Lycoming), and then-Chair of the Senate Appropriations Committee Pat Browne (R-Lehigh).
Interest groups that support RGGI have said they expected the state to appeal if Commonwealth Court ruled against Pennsylvania joining the program.
But Gov. Josh Shapiro has raised concerns about RGGI. He has said it’s not clear RGGI will address climate change while protecting energy jobs and ensuring affordable power. A working group he brought together on the issue recently released a report that said a cap-and-invest program would be optimal in supporting an energy transition that can benefit the environment and reduce emissions. But it did not endorse RGGI as the best option.
Shapiro spokesperson Manuel Bonder said the administration “is carefully reviewing the Commonwealth Court’s decision as we evaluate next steps.”
The Administration has 30 days to appeal to the state Supreme Court.
Wojcik’s opinion declares the RGGI rulemaking void and prohibits DEP from enforcing the rule.
“Where, as here, the moneys generated and received by the Commonwealth’s participation in the auctions are ‘grossly disproportionate’ to the costs of overseeing participation in the program or DEP’s and EQB’s annual regulatory needs, and relate to activities beyond their regulatory authority, the regulations authorizing Pennsylvania’s participation in RGGI are invalid and unenforceable,” Wojcik wrote. “Stated simply, to pass constitutional muster, the Commonwealth’s participation in RGGI may only be achieved through legislation duly enacted by the Pennsylvania General Assembly …”
Ceisler, in her dissenting opinion, wrote that there was not enough information to side with either party.
“Based upon the record before us, it does not seem that the emissions allowance auction process would impose what could be deemed fees in the traditional sense, but, by the same token, it is not entirely clear that the proceeds raised thereby would constitute a tax,” Ceisler wrote.
The RGGI rule was published in April 2022, but was paused by Commonwealth Court that July while legal arguments played out.
Senators also argued DEP sent the rulemaking to the Legislative Reference Bureau to be published before the state House had time to consider voting it down, that the rule violates the state’s Air Pollution Control Act, and that RGGI would be an illegal interstate compact. The opinion dismissed those claims as moot.
Senate Majority Leader Joe Pittman (R-Indiana), whose district includes a few of the state’s last coal-fired power plants and who has fought against RGGI, called the Commonwealth Court ruling a victory.
“With this decision, we have the opportunity to finally close a tumultuous chapter and move forward to determine the best legislative solution to foster greater energy independence, while ensuring the responsible development of our God-given natural resources,” Pittman said.
Environmental groups are hoping to see the case reach the Supreme Court.
Conservation Voters of PA Executive Director Molly Parzen called the ruling “a misguided but temporary setback.”
“Governor Shapiro’s record on protecting our air, water and natural resources is a robust one stretching back to his tenure as attorney general, county commissioner and state legislator. We are confident in his commitment to our environment,” Parzen said.
This story is produced in partnership with StateImpact Pennsylvania, a collaboration among The Allegheny Front, WPSU, WITF and WHYY to cover the commonwealth's energy economy.