Gov. Wolf Affirms Support for RGGI in 2020-21 Budget Address

From Natural Resources Defense Council, February 04, 2020

HARRISBURG, P.A. – Governor Tom Wolf today unveiled his proposed 2020-21 fiscal year budget agenda, laying out key priorities for Pennsylvania and doubling down on his commitment to joining the Regional Greenhouse Gas Initiative (RGGI).

A statement follows from Mark Szybist, Senior Attorney at the Natural Resources Defense Council (NRDC):

“Governor Wolf mapped out a strong vision to better the lives of all Pennsylvanians, including a firm commitment to joining the Regional Greenhouse Gas Initiative. Not only would this curb harmful climate pollution – it would also help clean up the air our children breathe, enable Pennsylvania to invest in a transportation system that works for everyone, and create family-sustaining jobs and a more equitable society. The Governor now has to take this blueprint and make it a reality.”

For more background, read: Governor Wolf Says PA Will Join RGGI. Now What?

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The Natural Resources Defense Council (NRDC) is an international nonprofit environmental organization with more than 3 million members and online activists. Since 1970, our lawyers, scientists, and other environmental specialists have worked to protect the world’s natural resources, public health, and the environment. NRDC has offices in New York City, Washington, D.C., Los Angeles, San Francisco, Chicago, Bozeman, MT, and Beijing. Visit us at http://www.nrdc.org and follow us on Twitter @NRDC.​

Senator pulls bill to give carbon allowances to Charles City plants

By Sarah Vogelsong, Virginia Mercury, February 27, 2020

A Democrat-backed bill that, under the state’s new carbon cap-and-trade regime, would have provided carbon allowances to two unbuilt natural gas plants in Charles City County died Thursday at the request of its patron.

Sen. Lionell Spruill, D-Chesapeake, asked for his bill, SB 992, to be stricken from the House Labor and Commerce Committee’s docket.

Spruill’s chief of staff said the senator “didn’t see a path forward for SB992 with other legislation progressing” and “felt it was best to strike the bill.”

The legislation would have benefited the planned C4GT plant and the Chickahominy Power Station by potentially reducing their costs of complying with the Regional Greenhouse Gas Initiative.

RGGI legislation cleared both the House and the Senate Wednesday, and Gov. Ralph Northam has indicated he intends to sign the bill into law.

Jef Freeman, director of development for Balico, the developer of the Chickahominy Power Station, had argued that the allowances ensured “equitable treatment for all generators.”

The administration opposed the measure, however, warning it could reduce state RGGI revenues by $131 million over three years.

According to documents obtained by the watchdog Energy and Policy Institute through a Freedom of Information Act request and shared with the Mercury, the Charles City County government, using talking points from a Balico lobbyist, had asked the administration to support the bill on the grounds that the projects would lead to an estimated $2.5 billion in new investments and “generate the most efficient and clean uninterruptible energy generation available in the current market.”

Republicans on the Senate Appropriations Committee accused Democrats of being inconsistent in their willingness to accommodate private companies in establishing RGGI, pointing to two amendments made to the bill that would allow Dominion to recover its compliance costs from customers and would clarify who would be responsible for purchasing allowances in the case of a tolling facility, a plant that a buyer pays to operate. (Under a tolling agreement, a buyer provides the plant with the fuel it needs to run and then in return receives the energy it produces.)

The Dominion amendment allows RGGI costs to be passed directly to customers, with no return for shareholders. Senior Vice President of Corporate Affairs and Communications Bill Murray has said the average customer’s monthly bill is likely to increase by $1.22 over the next five years. The State Corporation Commission has estimated bills will increase between $2 and $2.50 as a result of RGGI.

The second amendment stems from a dispute between the Tenaska tolling facility in Fluvanna and Shell, which takes its electricity. Despite Shell’s protestations, lawmakers added a provision to the RGGI bills that would make the buyer, rather than the tolling facility, responsible for auction allowance costs.

Republicans questioned why their colleagues across the aisle were willing to compromise on those measures but not with LS Power.

“I can’t get anyone to give me a good reason why we are treating [LS Power] differently than we treat Dominion Power and others,” Sen. Stephen Newman, R-Bedford, complained.

But Democrats have contended the situations are different.

In an earlier discussion, Lewis pointed out that while other amendments would cost the state revenues, the Tenaska amendment has no impact on the state’s bottom line but only clarifies who is responsible for the costs.

And Dominion, said Sen. Jennifer McClellan, D-Richmond, as a regulated utility enjoys constitutionally mandated protections that allow it to recover its costs.

“Whether we tell the SCC how those costs will be recovered or not, those costs will ultimately be recovered,” she said Tuesday. “LS Power is in a different position. LS Power had the ability to negotiate a contract knowing the risk that Virginia would eventually, or could eventually join RGGI. The RGGI discussion, the possibility of joining RGGI, was out there when LS Power entered into that agreement.”

Noticeably absent from discussion was any mention of Spruill’s SB 992, a bill that would grant special allowances to two controversial natural gas plants being planned for Charles City County. That measure, Department of Environmental Quality Deputy Director Chris Bast has warned, could force the state to carve out almost 40 percent of its total allowances, worth about $131 million over three years, for the projects.

Democrats and Republicans on the Senate Commerce and Labor Committee advanced that bill unanimously. On its final Senate floor vote, it passed 27-13, with eight Democrats voting in its favor. Six Democratic senators who voted the bill out of committee voted against it on the floor.

Sarah Vogelsong — Sarah covers environment and energy for the Mercury. Originally from McLean, she has spent over a decade in journalism and academic publishing. Most recently she covered environmental issues in Central Virginia for Chesapeake Bay Journal, and she has also written for the Progress-Index, the Caroline Progress, and multiple regional publications. In 2017, she was honored as one of Gatehouse’s Feature Writers of the Year, and she has been the recipient of numerous awards from the Virginia Press Association. She is a graduate of the College of William & Mary. Contact her at svogelsong@virginiamercury.com