Electric bills too high? Bad energy policies are to blame
Hot enough for you? If this muggy Pennsylvania heat doesn’t have you sweating, your monthly electricity bills will.
Power usage surged during recent heat waves, pushing electricity demand “to its highest level in 14 years,” according to the Pennsylvania Public Utility Commission. This power surge, the commission concluded, will “soon be reflected in monthly electric bills.”
But there’s another issue these higher electricity bills reflect: bad energy policies. Pennsylvania has abundant energy resources (e.g., natural gas, coal, nuclear, etc.). However, an unfortunate abundance of misguided energy policies has bled our families and businesses through higher electricity rates.
Case in point: the Regional Greenhouse Gas Initiative (RGGI), the multistate cap-and-trade compact that imposes a carbon tax on energy producers. In 2022, then-Governor Tom Wolf forced Pennsylvania into RGGI by unlawful unilateral executive actions. In the resulting litigation, the Commonwealth Court correctly ruled that RGGI’s carbon tax was unconstitutional because only the legislature can levy taxes. Gov. Josh Shapiro appealed the decision, plunging Pennsylvania’s energy sector into legal limbo.
It’s in the commonwealth’s best interests to stay out of RGGI. Economic forecasting by Power PA Jobs Alliance suggests that electricity bills will increase by 30% under RGGI. Also, Pennsylvania’s Independent Fiscal Office estimates that RGGI will add more than $780 million in new energy taxes annually–costs that will pass down to households and businesses.
RGGI doesn’t even need to go into effect to cause economic harm. The uncertainty caused by RGGI’s prolonged litigation has already chilled energy markets. Many production companies remain in a holding pattern while they wait for legal clarity. Adding insult to injury, taxpayers have shelled out more than $4.2 million in legal fees to litigate RGGI.
In lieu of RGGI, Shapiro has offered another “green” alternative: the Pennsylvania Climate Emissions Reduction Act (PACER), another carbon tax on Pennsylvania energy.
PACER is far from an upgrade. Analysis by the Commonwealth Foundation suggests the governor’s RGGI knockoff will add $2.2 billion in electricity costs to Pennsylvanians by 2035.
The governor has also proposed the Pennsylvania Reliable Energy Sustainability Standard (PRESS). PRESS mandates increased use of unreliable energy sources (i.e., solar and wind power), intensifying the commonwealth’s current renewable energy mandate, the Alternative Energy Portfolio Standards (AEPS). Currently, AEPS, which costs hundreds of millions of dollars in annual compliance expenses, requires 18% of Pennsylvania energy to originate from renewable sources. PRESS ups that number to 50%.
This forced reliance on unreliable sources comes at great expense. Wind and solar can’t adequately dispatch electricity when the wind isn’t blowing or the sun isn’t shining. These intermittent sources strain the grid and require expensive backup systems. PRESS would add $155 billion in new energy costs by 2035, according to analysis by the Commonwealth Foundation.
Combined, PACER and PRESS would raise electricity bills by $146 per month for the average Pennsylvania household. Pennsylvanians cannot afford these increased bills.
So, how do we bring these skyrocketing energy costs down?
First and foremost, lawmakers must abandon these “alphabet soup” proposals. Just say “no” to RGGI, PACER, PRESS, AEPS, and all other costly Green New Deal-styled abbreviations pushed by the governor.
Next, lawmakers must address the regulatory bottlenecks that inhibit energy production. For starters, bills like Senate Bill 333–also known as the Regulations from the Executive in Need of Scrutiny (REINS) Act–would require legislative approval of any new regulation with a $100 million economic impact, shifting the power away from unelected bureaucrats back to our elected representatives.
Even progressives and environmentalists should embrace cutting red tape. When surveyed, wind and solar developers cite local ordinances, zoning, and permitting as the leading causes of project cancellation. Meanwhile, lack of funding was the least-cited reason.
Comprehensive regulatory reform will streamline the approval process, boost output, and reduce costs due to increased competition. By cutting about a third of Pennsylvania’s 164,000 regulations, lawmakers could add more than 180,000 jobs and $9.2 billion to the commonwealth’s annual GDP.
Such reforms enjoy bipartisan support. About two-thirds of Pennsylvanians think that government red tape prevents energy production, drives up costs for consumers, and exaggerates environmental or safety benefits. Roughly the same number believes addressing rising energy affordability is more important than mitigating climate change.
Pennsylvania is an energy powerhouse. Our commonwealth exports more electricity than any other state. Plus, the Keystone State produces more carbon-free electricity than any other RGGI state. Yet, due to Gov. Shapiro’s ill-advised policies, Pennsylvanians are unable to reap the benefits of their homegrown energy dominance. It’s high time that the governor works with lawmakers to unleash Pennsylvania’s energy and usher in a new era of energy affordability for the good people of our great commonwealth.
And while it may remain muggy outside, Pennsylvanians shouldn’t sweat every time their electricity bill arrives.
Megan Martin is the chief operating officer and general counsel for the Commonwealth Foundation, Pennsylvania’s free-market think tank.