June 12, 2023
The Negative Impacts of the Energy Tax
On June 12th, the House Republican Policy Committee held the first in a series of energy policy hearings, inviting representatives of Pennsylvania manufacturers and small businesses to discuss the potential consequences of Governor Shapiro's proposed $663 MILLION energy tax, known as the Regional Greenhouse Gas Initiative (RGGI). The hearing highlighted the concerns of industry leaders, who questioned whether RGGI aligns with the core principles of protecting jobs, lowering consumer prices, and addressing climate change, as articulated by Governor Shapiro himself in April 2022.
The testifiers that joined the Policy Committee were as follows:
Greg Moreland - Pennsylvania State Director, NFIB
David Taylor - President & CEO, Pennsylvania Manufacturers’ Association
As the hearing delved into the ramifications of the Regional Greenhouse Gas Initiative (RGGI), one statement echoed throughout the room - Governor Shapiro's own words from April 2022:
“Let me be very clear. Energy policy for me must pass the test of protecting jobs, lowering consumer prices, and addressing climate change. It is not clear to me that RGGI meets that test.”
Governor Shapiro's stance on energy policy, as articulated in his own words, raises concerns about the apparent hypocrisy of his continued efforts to force Pennsylvania into joining RGGI. As industry representatives from NFIB and PMA highlighted, the proposed energy tax would have far-reaching consequences, potentially jeopardizing jobs, burdening consumers, and adversely affecting the state's economic competitiveness.
“Pennsylvania possesses natural resources few other states have. Let’s not squander an opportunity for growth.”
Greg Moreland
Pennsylvania State Director, National Federation of Independent Business (NFIB) |
Greg Moreland, representing the National Federation of Independent Business (NFIB), is a critical voice in energy policy discussions due to the organization's strong representation of small businesses across the state. As an essential advocacy group, NFIB understands the challenges faced by small enterprises and how energy policies can significantly impact their ability to thrive in the current economic climate.
Mr. Moreland questioned whether RGGI would fulfill its intended objectives:
Would it reduce carbon emissions? According to countless studies,
NO - the tax will merely lead to emissions "leaking" across state lines from neighboring West Virginia and Ohio.
Would it protect and create jobs? Again,
NO - RGGI will lead to the elimination of high-paying energy jobs, decommissioning of existing energy generators, and present financial obstacles for new and existing businesses.
Would it protect consumers? Yet again,
NO - Mr. Moreland asserted that RGGI, being a regressive tax, would disproportionately harm Pennsylvania's households and businesses that are already financially burdened.
“An energy tax will force PA to miss out on enormous opportunity.”
David Taylor
President and CEO, Pennsylvania Manufacturers’ Association (PMA) |
David Taylor, a repeat testifier before the House Republican Policy Committee, joined the conversation to share insight from the largest energy users in the Commonwealth. David Taylor's representation of the Pennsylvania Manufacturers’ Association (PMA) is crucial in the energy policy discourse due to the organization's deep understanding of the manufacturing industry's energy needs. PMA represents a vital sector of the Pennsylvania economy, and their concerns about energy policies reflect the potential impact on industrial growth, job stability, and consumer costs.
Mr. Taylor brought attention to the fact that existing coal-fired power plants, such as the Homer City plant, are already in full compliance with environmental standards set by the Department of Environmental Protection (DEP) and the Environmental Protection Agency (EPA). The closure of the Homer City plant, a direct result of bad energy policy like RGGI, raises concerns about the fate of other energy generators across the state. Even without RGGI in existence the construction of new energy generators throughout the state has come to a standstill due to the ever-imposing threat of an unsustainable energy tax.
Pennsylvania stands as the number one exporter of energy in America, distinguishing it from existing RGGI states that largely rely on exported PA energy. Mr. Taylor warned that imposing an energy tax on Pennsylvania would be unique and unprecedented, potentially putting the state's economy at risk as well as the stability of the East Coast’s electric grid.
Additionally, he highlighted that coal, natural gas, and oil are not just energy sources but vital manufacturing feedstocks. An energy tax would not only raise energy bills for manufacturers but also increase material input costs for critical industries such as glass and steel production. The utility of our natural resources, and byproducts from their refinement, cannot be disregarded when discussing an energy tax.
Furthermore, Mr. Taylor cautioned that any reduction in production within Pennsylvania could lead to the offshoring of manufacturing to other states or abroad, allowing production to occur outside the scope of Pennsylvania's regulations and environmental standards. Moving PA manufacturing overseas, where there is less regulation and oversite, will not lead to environmental or social benefits here or abroad. Just as Canadian wildfire smoke permeated PA air, exporting PA jobs and manufacturing to countries unwilling to protect their environment will still pollute our air and water from afar.
Lastly, he stressed the potential strain on Pennsylvania's electric grid, with the possibility of electrification and the closure of existing generators resulting in risks of rolling blackouts and an inability to meet baseload energy demands. With ever-increasing reliance on more electricity to power our “smart” homes and electric vehicles our grid cannot risk underproducing the electricity needed to meet modern demands.
The day’s hearing underscored the critical concerns raised by Pennsylvania manufacturers and small businesses regarding the negative impacts of an energy tax. The imminent energy tax will have far-reaching consequences, posing challenges for the state's businesses, consumers, and industrial growth, while potentially shifting manufacturing and production outside the state's regulatory framework. The committee's critical analysis serves as a call for further examination and discussion before implementing such sweeping policy changes with significant economic implications, especially considering Governor Shapiro's own skepticism about an energy tax’s ability to meet the standards for energy policy he once professed. The risk of an energy tax is too great to ignore, and the House Republican Policy Committee will continue to support PA businesses and citizens as we combat poor energy policy decisions.