Legal bills top $4.2M in fight over key climate change program

HARRISBURG — Pennsylvania lawmakers have spent more than $4.2 million on bills fighting for the state’s participation in a multistate effort to combat climate change, documents obtained by Spotlight PA show.

The fight over the Regional Greenhouse Gas Initiative (RGGI) began in 2019 when former Democratic Gov. Tom Wolf issued an executive order directing the commonwealth to join a cap-and-trade program.

Under RGGI, about a dozen states agree to limit the total carbon dioxide emissions that power producers within their borders can emit annually. To emit carbon dioxide, most power plants in participating states must buy allowances in quarterly auctions at prices set by the states.

States can use the revenue from the sale for climate change mitigation efforts, lower electricity costs for consumers, or other initiatives; given Wolf’s rationale for Pennsylvania joining RGGI, the state would be required to funnel the permit revenue into the Clean Air Fund, which supports pollution-reduction efforts.

Two active lawsuits are currently seeking to invalidate the state’s participation in RGGI: one filed by energy companies and unions, and the other by legislative Republicans. Both parties won victories last November when Commonwealth Court invalidated the state’s participation. The Shapiro administration has appealed both decisions to the state Supreme Court.

In recent years, these appellate courts — which handle cases involving state government — have been asked to weigh in on several major policy disputes that originated in the Legislature. That includes the final selection of Pennsylvania’s current congressional map.

Louis Rulli, a law professor at the University of Pennsylvania, says he’s not surprised by the number of disagreements between the executive branch and the legislature, especially given the divided party control. But using the court system to arbitrate those decisions can come with costs.

“When the parties can’t agree, they resort to these tools. They’re not inappropriate tools, but they come at a price and the people of Pennsylvania are paying for it,” Rulli told Spotlight PA.

Between October 2019 — when Wolf issued the executive order — and June of this year, state Senate Republicans paid McNees Wallace & Nurick $1.2 million to argue that Wolf exceeded his executive authority by joining RGGI.

According to the invoices, the attorneys charged the caucus with drafting the petition, researching and arguing the case in Commonwealth Court. Those efforts included serving a subpoena on the executive director of RGGI, Inc., the nonprofit that runs RGGI.

State House Republicans spent just under $370,000 on legal fees for Post & Schell, PC during the same period. Records show their lawyers worked with the state Senate on RGGI’s executive branch lawsuit.

Meanwhile, the governor’s office paid Ballard Spahr more than $2.7 million for his work on RGGI’s lawsuits during the same period. Wolf has endorsed RGGI, but Democratic Gov. Josh Shapiro has straddled the agenda—defending the governor’s right to make executive decisions while advancing his own alternative to RGGI.

Outside attorneys for the governor’s office have been working on the litigation in both cases, working with agencies including the Department of Environmental Protection and communicating with environmental groups such as the Clean Air Council, which was one of several that recently won the right to intervene in the challenges.

A spokesman for Shapiro did not respond to a request for comment.

In a statement, state Senate Majority Leader Joe Pittman (R., Indiana) blamed both Wolf and Shapiro for forcing the Legislature to continue funding legal battles between the two branches of government and “spending taxpayer dollars” on the lawsuit.

In both cases, the crux of the matter is whether the regulations imposed by RGGI constitute a tax or a royalty. Opponents of the program argue that the cap on energy companies’ emissions amounts to a tax, which would make Wolf’s unilateral move to join the group unconstitutional, since only the legislature has the authority to impose taxes.

Supporters of the program say the federal Clean Air Act gave Wolf the right to join RGGI and argue that imposing an emissions limit on energy companies qualifies as a fee that the governor can implement without legislative approval.

Shapiro did not take a firm stance on RGGI during his gubernatorial campaign. After taking office, he convened a working group to determine whether RGGI would help meet the state’s climate goals, create energy jobs and benefit consumers.

While the group did not reach a consensus on the initiative itself, the memo said an emissions trading program would be the best way for the state to achieve those goals.

Last March, Shapiro proposed just that. He called on the Legislature to enact an alternative to RGGI, describing the proposal, the Pennsylvania Climate Emission Reduction Act, as a Pennsylvania-specific cap-and-trade program.

Shapiro says the program would allow states to set their own cap, rather than having RGGI states set it collectively, and decide how revenue from the supplement is used.

Democrats have introduced Shapiro’s proposal as a bill in both chambers, but neither bill has yet been considered.

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Spotlight PA is an independent, nonpartisan, nonprofit newsroom dedicated to investigative journalism and public service that holds government accountable and drives positive change in Pennsylvania.

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