The PA Chamber joined the Pennsylvania Manufacturers’ Association, Industrial Energy Consumers of Pennsylvania, Pennsylvania Energy Consumer Alliance, and National Federation of Independent Business in signing on to an amicus brief last week asking the Pennsylvania Supreme Court to affirm the Commonwealth Court’s decision regarding the implementation of the Regional Greenhouse Gas Initiative (RGGI). That decision, Shirley v. PA Legislative Reference Bureau (LRB), determined that this regulation is a tax – not a fee – and therefore cannot be levied without legislative approval.

The brief also argues that the Air Pollution Control Act and the Environmental Rights Amendment do not authorize DEP to assess this new carbon tax, warning that Pennsylvania consumers will bear the burden of the costs of RGGI if it does become law.

Echoing the Commonwealth Court decision, the amicus brief calls the RGGI tax implications on consumers “grossly disproportionate” to the cost of the regulation – making it unlawful. Based upon the actual average auction price per allowance, DEP would have generated $904,200,000 had PA participated in the RGGI auctions. In the 2023-24 fiscal year, the General Assembly appropriated $202,953,000 for ALL of DEP’s operations – meaning that the RGGI auctions would have generated an amount equal to four-and-a-half times DEP’s ENTIRE budget. At the most recent auction on September 4, 2024, given the price of a CO2 allowance, DEP’s annual take could exceed $1.25 BILLION.

The amicus brief warns that if RGGI is allowed to proceed, it will drive up the already increasing price of electricity in Pennsylvania, making the Commonwealth less competitive and leading businesses to relocate to neighboring states not participating in RGGI, i.e., Ohio and West Virginia. It will also undermine Pennsylvania’s role as an energy-exporter. The PA Chamber and its fellow amicus brief filers believe that tax implications such as this should only be made with legislative authority, not by executive mandate.