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RGGI Saga Continues After Commonwealth Court Enjoins Implementation in PA

Updated: Sep 9, 2022

The saga of Pennsylvania’s quest to enter the Regional Greenhouse Gas Initiative – or RGGI – has yet another chapter: Last week, a Commonwealth Court ruling essentially put the implementation of the program on pause for now here in the Keystone State.

First, some quick background before we get into the nitty-gritty: RGGI is a multistate cap-and-trade program for certain power plants’ carbon dioxide emissions. Under RGGI, those power plants must purchase emissions credits in order to emit carbon dioxide and the proceeds from those purchases would (in Pennsylvania, anyway) be used to fund renewable energy and energy efficiency programs.

Got it? OK – now here are some need-to-know details about how we got to this latest ruling.

Here’s what’s going on:

The regulations that would implement RGGI in Pennsylvania were subjected to legal challenge by industry groups and Republican legislators. On July 8 the Commonwealth Court of Pennsylvania sided with those groups and entered a preliminary injunction that prevents Pennsylvania from implementing, administering, or enforcing the RGGI regulations.

“The court determined that the requirement that the power plants purchase emission credits is a tax rather than a regulatory fee, and was, therefore, a violation of Pennsylvania’s Constitution, which reserves the power to levy taxes to the General Assembly,” GASP senior staff attorney John Baillie explained. “The court also determined that by funneling the proceeds from the sale of emission credits to renewable energy and energy efficiency programs RGGI violates Pennsylvania’s Air Pollution Control Act, which allows DEP to impose fees only to cover the costs of operating its air pollution control program.”

In the meantime, the groups that petitioned for the preliminary injunction must post a bond in the amount of $100 million (and nope, that is not a typo) to ensure the Commonwealth is compensated for any damages it might suffer if the injunction is eventually lifted.

Stay tuned, we’re continuing to follow the issue and will keep you posted.

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