Client Alert
(by Kevin Garber, Jean Mosites and Casey Snyder)
RGGI Rulemaking Special Informational Meeting
On April 23, 2020, DEP presented modeling results of Pennsylvania’s potential participation in the Regional Greenhouse Gas Initiative (RGGI) cap and trade program at a special joint information meeting with the Air Quality Technical Advisory Committee and the Citizens Advisory Council.
DEP utilized consulting firm ICF International’s Integrated Planning Model to estimate the effects joining RGGI would have on Pennsylvania’s electricity generation, CO2 emissions and the PJM Interconnection. DEP is proposing an initial CO2 baseline budget allowance of 78 million short tons of CO2. If Pennsylvania’s regulation becomes effective in January 2022 as proposed by Governor Tom Wolf, the 78 million short ton CO2 budget would decrease annually by approximately 2.5 tons a year, arriving at a budget of 58 million tons in 2030, which is a 25 percent decrease from 2020. DEP proposed setting aside 9.3 million allowances annually for waste-coal-fired generators.
DEP asserted during the presentation that by joining RGGI:
- Pennsylvania would realize “significant CO2 reductions” immediately beginning in 2022 and continuing through 2030 but DEP did not quantify the reductions.
- Pennsylvania would remain a leading electricity exporter at roughly historic generation levels.
- Wholesale energy prices would increase only slightly.
- Pennsylvania’s generation mix over the next decade would favor gas over coal but generation from renewables will not increase significantly.
- Pennsylvania would take a critical step toward meeting unspecified GHG reduction goals.
DEP offered relatively little data to substantiate the above claims. Its presentation did not address to any meaningful degree the effects joining RGGI will have on Pennsylvania’s economy and job market, how RGGI proceeds will be reinvested, or the estimated price of electricity at the household level. DEP did not disclose the initial proposed cost for CO2 allowances although the ICF model predicted the cost would rise from about $5.50/ton currently to over $7/ton in 2025. Before the regulation is finalized, a cost-effectiveness analysis will be required under Pennsylvania’s Regulatory Review Act, Commonwealth Attorneys Act, and the Climate Change Act. The draft proposed regulation and two spreadsheets containing the underlying data used in the presentation are available on DEP’s website, one showing modeling results if Pennsylvania joins RGGI, and the other if it does not.
DEP intends to proceed with the RGGI rulemaking despite the current economic upheaval caused by the Coronavirus. The draft proposed rule will be discussed and presented for a vote by the Air Quality Technical Advisory Committee members at the upcoming May 7 AQTAC meeting. A fifteen-minute public comment period is not scheduled to begin until after the vote. The draft proposed rule will also be discussed at the May 19 Citizens Advisory Council meeting. The proposal is scheduled to be presented to the Environmental Quality Board on July 21 for a vote on whether to adopt it as a proposed rulemaking. If it is adopted, public comment and hearings will begin in September 2020. The final rulemaking could be promulgated by Fall 2021. For more information on the draft proposed rule, see Babst Calland’s coverage of the rule in February 2020.
Update to Pennsylvania Climate Impacts Assessment
On April 20, 2020, DEP released its third update to the Pennsylvania Climate Change Impacts Assessment Report, prepared by Penn State’s Environment and Natural Resource Institute.
Section 3 of the Pennsylvania Climate Change Act (Act 70 of 2008) requires DEP to update and publish a report assessing the effects of climate change in Pennsylvania every three years. DEP published the first report in 2009 and published updates in 2013 and 2015.
The 2020 report estimates that Pennsylvania’s average temperature increased nearly 2° F and average annual rainfall increased 10 percent since 1901. By mid-century, the report predicts an average annual rainfall increase of 8-12 percent and an average temperature increase of 4.9° F. The 2020 report also addresses climate change effects on infrastructure and watershed management, two important subjects for industry, energy production, and commercial activity.
Infrastructure Key Findings
- Flooding, especially in southeastern Pennsylvania, appears to have the most significant potential future impact on infrastructure systems.
- Flood-related damage is expected to be localized rather than affecting the regional power grid, but localized damage could disrupt railways and other infrastructure systems.
- Large portions of energy and transport infrastructures in Pennsylvania are potentially susceptible to flooding.
- Infrastructure in southwestern Pennsylvania is susceptible to landslides from heavy precipitation events.
- Regional and local infrastructure planning do not always incorporate climate change adaptation.
- Counties vary in their ability to respond to climate change effects.
Watershed Management Key Findings
- Predicted climate change will increase the primary weather drivers of nonpoint pollution (rainfall and runoff events) and the annual average volumes of runoff from agricultural and urban lands that must be treated to meet water quality goals.
- Changes to stormwater best management practices and evaluation of those BMPs in response to changing weather conditions will likely be required.
Babst Calland’s environmental attorneys are closely following the RGGI rulemaking and climate change developments in Pennsylvania. If you have questions about the draft proposed rule or the latest Climate Impacts Assessment Update and related DEP climate change reports, please contact Kevin J. Garber at 412-394-5404 or kgarber@babstcalland.com, Jean M. Mosites at 412-394-6468 or jmosites@babstcalland.com, or Casey J. Snyder at 412-394-5438 or csnyder@babstcalland.com.
