The Pennsylvania Senate approved bipartisan legislation on Tuesday to repeal the Regional Greenhouse Gas Initiative (RGGI) electricity tax.

Senate Bill 186 repeals the state’s participation in the multi-state compact and ensures that decisions on electricity taxes or emissions programs go through the legislature.

RGGI is a cooperative effort among 11 Eastern states to reduce carbon dioxide (CO2) emissions from power plants within each participating state.

Together, the participating states have established a regional cap on CO2 emissions, which sets a limit on the emissions from regulated power plants within the RGGI states. Over time, the regional cap declines, so that CO2 emissions decrease in a planned and predictable way. Since 2005, the RGGI states have reduced annual power sector emissions 50 percent, which is almost 50% faster than the nation as a whole, and have so far raised over $8.6 billion to invest into local communities.

According the state Senate Republicans, RGGI would increase electricity rates for consumers, cut energy and has placed a halt on expansion of numerous manufacturing jobs. No new investments in baseload generation have come to Pennsylvania in the six years since the Wolf Administration attempted to enter the state into RGGI.

An analysis from the Independent Fiscal Office (IFO) concluded RGGI could nearly quadruple new electricity costs for consumers.

“For nearly six years, we have been taking actions to stop the RGGI Electricity Tax,” said Sen. Joe Pittman (R-Armstrong/Jefferson/Indiana/Westmoreland). “Even though the Commonwealth Court has ruled RGGI is unconstitutional, Gov. Shapiro has continued his push with the Supreme Court. If the RGGI Electricity Tax would go into effect, it would mean hundreds of millions of dollars of increases on electric bills, impacting every electricity consumer in this commonwealth. We must help families feeling the strain of inflation – not put more pressure on their household budgets.”

In 2019, then Gov. Tom Wolf signed an executive order directing the state to join the RGGI and for the DEP to propose regulations to cut carbon emissions. Legislators sued saying it would result in cost increases that were essentially a tax for Pennsylvania consumers and businesses. In 2023, the Commonwealth Court ruled RGGI does qualify as a tax and cannot be implemented without legislative approval.

“It is time for Pennsylvania to take charge of its own energy future,” said Sen. Gene Yaw (R-Bradford/Lycoming/ Sullivan/Tioga/Union). “We must close this chapter and move forward with responsible policy that strengthens grid reliability, incentivizes development, creates jobs and protects consumers from higher costs.”

Officials said the Pennsylvania Department of Environmental Protection (DEP) and the Environmental Quality Board was moving forward with regulations to establish a CO2 Budget Trading program, despite opposition in the General Assembly from both parties.

A “CO2 budget training program” is a course designed to educate individuals on the concept of carbon budgeting, teaching them how to calculate, manage, and reduce their organization’s carbon dioxide emissions by setting a specific limit on the total amount of CO2 they can emit within a set time period, often used in sustainability strategies and climate action plans; it typically covers topics like greenhouse gas accounting, emission reduction strategies, carbon offsetting, and reporting methodologies.

The vote this week “advances critical legislation to shield Pennsylvanians from being strong-armed into an unlawful electricity tax that will affect families across the state,” Sen. Camera Bartolotta (R-Beaver/Greene/Washington) said on Wednesday. “After Gov. Josh Shapiro’s budget address yesterday, it’s clear he isn’t concerned about the state’s taxpayers and the financial challenges they already face. However, my colleagues and I will continue to defend them and their wallets.”

“Senate lawmakers who voted to repeal RGGI understand what Gov. Shapiro does not – RGGI is an unconstitutional energy tax paid for by hardworking Pennsylvanians,” said Elizabeth Stelle, Vice President of Policy at the Commonwealth Foundation. “Involvement in carbon taxes like RGGI would raise Pennsylvanians’ electric bills by 30 percent, an initiative opposed by 71 percent of Pennsylvanians. Energy is Pennsylvania’s superpower. The best way to harness energy opportunities in the Keystone State is to maintain our competitive edge as a major producer and exporter of electricity. This decisive act of leadership by Pennsylvania Senators is a step in the right direction to unleash Pennsylvania energy and keep costs low for hardworking families.”

The bill now moves to the House of Representatives.