RGGI CO2 emissions price hits quarterly high in potentially worrying sign for PA electric taxpayers

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With the most recent data from this summer’s 56th quarterly Regional Greenhouse Gas Initiative (RGGI) auction showing a record clearing price, a Pennsylvania group took the opportunity to criticize Governor Tom Wolf’s plan for the state to join the cap and trade system. market-based program.

“PA Electricity Ratepayers Cheer for Another Month Without Bearing the Burden of $800 Million-A-Year #RGGI ELECTRICITY TAX 30-40% Electricity Rate Hikes” , tweeted the Power PA Jobs Alliance on Thursday evening. “@GovernorTomWolf should be ashamed of this anti-poor, anti-worker ‘legacy’.”

RGGI is a cooperative agreement among 11 East Coast states to reduce CO2 emissions from power plants and is the first program in the nation to cap CO2 emissions from the electricity sector.
In RGGI states, regulated power plants are required to purchase an RGGI CO2 quota for each short ton of CO2 they emit. According to the US Energy Information Administration (EIA), emission allowance prices are influenced by several factors, such as the predefined limit of permitted emissions, the number of market participants and energy prices.

RGGI’s 56th quarterly auction held on June 1 resulted in “a record clearing price” of $13.90 per ton for CO2 emissions allowances, beating the price of prior quarter clearing price of $13.50 per ton and the June 2021 clearing price of $7.97 per ton by 74%, the EIA reported yesterday.

“Prices for allowances set in the RGGI auction have increased since the June 2017 auction, which closed at $2.53 per tonne,” the EIA said, noting that the 57th quarterly RGGI auction closed. held on September 8. Data from this auction will be available. in some months.

The original member states of the RGGI are Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont. From January 2021, Virginia became a full participant in the RGGI CO2 emissions allowance market.

Pennsylvania, one of the nation’s largest coal-producing states, was to join the RGGI as the 12th member; however, in July, the Pennsylvania Commonwealth Court issued a preliminary injunction that temporarily prevents the state from implementing its CO2 budget trading program.
Along with the Power PA Jobs Alliance, opposition to Pennsylvania’s participation in the RGGI also exists from labor, coal and natural gas advocates, such as the Pennsylvania Independent Oil and Gas Association, Pennsylvania Manufacturers’ Association and the conservative Citizens Alliance of Pennsylvania.

The Power PA Jobs Alliance said in March that the Wolf administration conducted modeling to estimate the consumer impact of the RGGI electricity tax when the RGGI carbon tax rate was $5.20. . Since this original modeling, the RGGI carbon tax rate has increased to $13.50, or 160%.

“As a result, the Wolf modeling underestimates the impact of the RGGI tax on Pennsylvania electricity consumers,” the alliance said, citing Pennsylvania Independent Fiscal Office data that found RGGI will cost customers Pennsylvania $800 million a year, or $6.4 billion over eight years.

On the other side, supporters of the plan include not only the governor and many state Democratic lawmakers, but organizations such as the Sierra Club, Clean Jobs Pennsylvania, the Environmental Defense Fund and Conservatives for Responsible Stewardship. , as well as the Ceres group of investors and companies. such as oil giant BP plc.

The Pennsylvania Department of Environmental Protection says the state’s participation in RGGI would help the state fight climate change, meet its GHG emissions goals, reduce air pollution, and improve the health of citizens, among other benefits.

As the nation’s third largest electricity producer and coal producer, Pennsylvania emits the fourth highest number of carbon dioxide, according to the EIA.

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