Independent Analysis Concludes RGGI Carbon Tax Could Increase Pennsylvania Electricity Costs 3.8 Times more than Wolf Administration Projections

HARRISBURG – Impartial analysis from the Independent Fiscal Office (IFO) projects the Regional Greenhouse Gas Initiative (RGGI) could nearly quadruple new electricity costs for consumers, Sen. Camera Bartolotta said today.

The nonpartisan IFO reviewed the Wolf administration’s outdated RGGI modeling and presented its findings to a joint hearing of the Senate Environmental Resources and Energy Committee and the Community Economic and Recreational Development Committee on Tuesday.

“While we already knew that joining RGGI would come at a serious cost to Pennsylvanians, we did not know how much it would hurt them until today,” Bartolotta said. “Anyone who goes to the grocery store or gas station knows how much costs are already rising. Even if joining RGGI actually would offer the benefits promised – which experts deny – we cannot, in good conscience, saddle Pennsylvanians with yet another increased cost at a time like this.”

IFO Director Matthew Knittel said Pennsylvania could spend upwards of $781 million annually on emissions credits at the RGGI auctions – nearly four times the amount anticipated by the administration’s taxpayer-funded 2020 analysis used to justify Pennsylvania’s participation in RGGI. Knittel told the panel that the costs will be passed on to energy consumers, including residential consumers, employers, schools and other ratepayers.

The IFO analysis also concluded that emissions reductions between 2008 and 2020 for the 10 RGGI states were comparable to non-participating states.

When Gov. Tom Wolf signed the 2019 executive order that forced Pennsylvania into the regional carbon tax program, auction clearing prices – the amount energy producers pay to buy “credits” to offset their emissions – were $3.24 per short ton. At that time, taxpayer-funded analysts insisted prices would stay under $5 through 2030.

The auction clearing price set on Dec. 1, however, exceeded $13 per short ton, more than four times what the department estimated and 40% above the Sept. 8 clearing price alone.

The IFO said this spike in clearing prices casts doubt on every projection the former analysis made. For example, net generation from coal and natural gas – two sources of carbon emissions targeted by RGGI – will likely grow 16%, not the flat rate assumed by the administration, to account for increased demand.

The administration’s effort to force Pennsylvania into RGGI is being challenged in court and could face additional legislative action.

CONTACT: Katrina Hanna, 717-787-1463