Pennsylvania high court appears split over plan to force power plants to pay for carbon emissions

HARRISBURG — Justices on Pennsylvania’s Supreme Court indicated Wednesday that they are likely to have split opinions on whether a governor has the right to force power plant owners to pay for their planet-warming greenhouse gas emissions, or whether he first needs approval from a Legislature that refuses to go along with the plan.

Hanging in the balance is Pennsylvania’s effort to become the first major fossil fuel-producing state to adopt carbon pricing.

On Wednesday, the state’s highest court listened to arguments on whether a lower court was right last summer to halt Pennsylvania’s participation in a multistate consortium that imposes a price and declining cap on carbon dioxide emissions from power plants.

But the justices repeatedly turned the conversation to the underlying legal question still being considered by the lower court: whether former Gov. Tom Wolf usurped the Legislature’s constitutional authority to approve any form of taxation.

In that dispute, Republican lawmakers contend the carbon-trading plan is an unconstitutional tax because it lacks legislative approval; state lawyers contend it is a fee that a state agency has the authority to impose to operate a program.

Justice Christine Donohue, a Democrat, suggested it might be difficult to rule on one issue without settling the other.

“I don’t even know how we would make that holding without tipping our hand as to whether or not it’s a tax or a fee and we just don’t play ‘hide the coin’ that way,” Donohue told a lawyer for Senate Republicans.

At stake is no small amount of money: Pennsylvania would have raised more than $1 billion had it begun participating in 2022 when Wolf intended, according to calculations by the Natural Resources Defense Council, a nonprofit environmental advocacy group.

Taking part in the consortium became the central plank in Wolf’s plan to fight global warming. It also is a political minefield for Gov. Josh Shapiro, Wolf’s successor and a fellow Democrat who was endorsed by labor unions that fought the plan.

The high court comprises four justices elected as Democrats, two as Republicans and one vacancy.

Justice Kevin Brobson, a Republican, signaled a number of objections to the plan.

At one point, he questioned whether the cost of the carbon-dioxide allowances that power plants would have to buy is too excessive to be considered a fee that pays for a regulatory process.

Then he suggested the plan is a “chicken and egg thing” through which an agency imposes a fee before deciding how to spend it, an avenue that he said could be abused by agencies with an underfunded program.

“Then aren’t we bypassing the General Assembly’s authority and the governor’s authority and we’re just basically allowing agencies to pump up their inadequate funds and just build these coffers?” Brobson asked a lawyer representing Shapiro’s administration.

The lawyer, Matthew White, said the money must be spent in accordance with the state’s air pollution laws and that the regulation envisions the money being used to enhance energy-efficiency programs, renewable energy usage and efforts to cut greenhouse gas emissions.

White also said there is no evidence that the fees are adequate to address the problem of greenhouse gas pollution.

Democratic justices closely questioned assertions by a lawyer for Senate Republicans that the carbon-pricing plan cannot legally be a fee, partly because it works through regional auctions that impose costs and requirements on power plants in certain states, but not others.

“So because it doesn’t address everything, it shouldn’t address anything in terms of regional impact?” Donohue asked.

Donohue also seemed to suggest that the aims of the carbon-pricing program could be protected by an environmental rights amendment to Pennsylvania’s constitution.

Shapiro has maintained that he does not support entering the consortium, the Regional Greenhouse Gas Initiative, on Wolf’s terms.

But he continues to fight for it in court and his top environmental protection appointee told lawmakers in March that joining the consortium is “a vehicle” that could help meet Shapiro’s “strong and very aspirational goals” to help the environment.

Republican lawmakers, fossil fuel interests, industrial power users and trade unions oppose it, saying it will hurt the state’s energy industry and drive up electric bills.

State officials, independent researchers and environmental advocates say the money reaped through the auction of emission allowances would stabilize electricity bills, or lower them, while cutting greenhouse gas emissions and helping transition fossil fuel workers into new industries.