In a major decision issued last Wednesday, the Commonwealth Court ruled Pennsylvania’s attempted entry into the Regional Greenhouse Gas Initiative (RGGI) was unconstitutional and cannot be enforced.

Pennsylvania’s participation in the RGGI compact would signify a major shift in the regulatory framework for the state’s power generation industry. Under its terms, power plants would face state-mandated limits on their CO2 emissions and be required to purchase allowances for these limits to be increased.

PA Chamber President & CEO Luke Bernstein made the following statement in response to the ruling:

“We agree with the Commonwealth Court’s conclusion that joining RGGI would result in a tax on energy producers and that only the legislature has the power to tax. We emphasized this point in an amicus brief our organization submitted with several other groups, and we appreciate the Court’s recognition of our concerns.

“We also shared other concerns of business, labor, consumers, and state lawmakers that Pennsylvania’s entrance into RGGI would have threatened to significantly increase energy prices at a time when businesses and families are already facing high prices and the grid operator is raising red flags about the pace of power plant retirements. Policymakers should embrace abundant domestic energy production, facilitate building new infrastructure, support competitive markets, and set long-term policies that encourage innovation and prioritize reliability. This comprehensive approach is congruent with emissions reduction goals, and Pennsylvania – which is second nationally in the reduction of greenhouse gas emissions since 2005 – should continue these efforts.

“However, as we noted at the onset and throughout the process, the regulation did not sufficiently protect the state’s electricity and manufacturing sectors, nor did it guard against the potential for significant run-up in electricity or commodity prices. Businesses, whether they generate or consume power, need both affordable energy and long-term certainty.

“We encourage the Governor to let the court’s decision stand and continue working with stakeholders and the General Assembly on policy that leverages our state’s strengths for the benefit of our economy, national security, and the environment.”

Full text of the Commonwealth Court’s decision is available here.