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Senate of Pennsylvania
Session of 2019 - 2020 Regular Session


Posted: September 17, 2019 05:27 PM
From: Senator Joe Pittman and Sen. Gene Yaw, Sen. David G. Argall
To: All Senate members
Subject: Requiring Legislative Approval for Imposing a Carbon Tax
A carbon tax is a major energy and fiscal policy initiative, and if such a tax is to be imposed on Pennsylvania employers, we believe it should be approved by the General Assembly. Beyond the fiscal impact on Pennsylvania manufacturers, coal and gas electric generation, consumers, and future economic investments made in our state, it also creates serious constitutional questions of checks and balances between co-equal branches of government.

To support the authority of the General Assembly on this issue, we will introduce legislation to delineate the process for legislative approval before Pennsylvania imposes a carbon tax on employers engaged in electric generation, manufacturing or other industries operating in the Commonwealth, or enter into any multi-state program, such as the Regional Greenhouse Gas Initiative (RGGI), that would impose such a tax.

Any carbon tax will ultimately be paid for by Pennsylvania residents and employers. Pennsylvania is already ahead of the carbon dioxide reduction goals established under Governor Wolf’s Climate Action Plan. Jeopardizing thousands of family sustaining jobs and triggering significant electricity rate increases is not a sound approach, especially within a process bypassing the General Assembly. The marketplace has achieved significant reductions in carbon emissions in our Commonwealth.

Since Pennsylvania’s deregulation of electricity, 19 coal-fired electric generating units (EGUs) have or are in the process of closing or converting to natural gas. If Pennsylvania adopts a carbon tax by joining the RGGI, the remaining coal-fired EGUs would be forced to close instead of paying hundreds of millions in additional taxes. These closures would lead to the direct elimination of thousands of family sustaining jobs across the Commonwealth and millions in local and state tax revenues. The significant negative economic consequences would be compounded regionally as these coal-fired EGUs consume nearly one-fifth of Pennsylvania’s bituminous coal production, an employer base that provides nearly $7 billion in total economic output throughout Pennsylvania

Beyond the closure of coal-fired EGU’s, joining RGGI or implementing any other form of a carbon tax would lead to the closure of every coal refuse-fired EGU. Burning coal refuse for energy production provides significant environmental benefits long recognized by this General Assembly and contributes $615 million annually to our state’s economy.

Ultimately, with the loss of Pennsylvania’s coal and coal refuse EGUs - nearly one-quarter of our total electric generation capacity - the burden of a carbon tax on power generation would be paid entirely by Pennsylvania’s natural gas-fired EGUs making natural gas-fired EGUs in the Commonwealth less competitive with plants in neighboring states driving investment in natural gas electric generation to other states.

We urge you to join us in sponsoring this legislation to ensure the authority of General Assembly in enacting such policy initiatives while protecting thousands of family sustaining jobs and every consumer of electricity in the Commonwealth.

Introduced as SB950