RGGI Hurt Pennsylvanians. Shapiro’s Lightning Plan Will Be Worse
Pennsylvania spent six years watching energy investment flee the state — all because of the mere possibility of a carbon tax scheme. Now, Gov. Josh Shapiro wants to try something even more destructive, promising it’ll be different this time. However, Pennsylvanians struggling to afford their electricity bills should be skeptical.
It all began with the Regional Greenhouse Gas Initiative (RGGI). Back in October 2019, then-Gov. Tom Wolf issued an executive order to force Pennsylvania into RGGI, the multistate compact that imposes a carbon tax on all its members.
For six years, the state was stuck in limbo while the issue played out in court. In 2023, the Commonwealth Court ruled that Wolf’s order unconstitutional, invalidating Pennsylvania’s RGGI membership. But Shapiro appealed that decision, prolonging the unnecessary litigation. Then, during budget negotiations in November 2025, state lawmakers finally agreed to permanently exit RGGI. In the end, Pennsylvania taxpayers paid more than $4 million in legal fees to litigate this whole mess.
But by then, the damage was already done.
A new study by the Commonwealth Foundation demonstrates how six years of RGGI uncertainty scared away more than $5 billion in investment in new electricity generation. Proposals to develop new generation dropped by 38% during the six-year window compared to the prior period. Natural gas proposals, the lifeblood of Pennsylvania’s bread-and-butter industry, collapsed by 65%.
And even if developers submitted proposals, very few came to fruition. Before RGGI, about three-fourths of proposals reached operation. During RGGI, that number plummeted to 9%.
Meanwhile, Pennsylvania’s westward neighbor, Ohio, tells a different story.
On paper, Pennsylvania and Ohio have a lot in common. Both are part of the PJM grid. Both have access to the Marcellus and Utica Shale formations, which produce nearly one-third of total U.S. natural gas.
But there is one critical difference: Ohio never joined RGGI.
And whatever Pennsylvania lost, Ohio gained. When Pennsylvania’s energy pipeline shrank during its six-year flirtation with RGGI, Ohio’s energy project pipeline grew by 33%. Also, the state’s natural gas conversion rate — the rate at which proposals develop fully into operation — rose from 61% to 78% during the same period.
Bechtel, the multinational construction firm, provides an illustrative anecdote. The company originally planned to build a $1 billion natural gas-fired power plant in Clinton County, Pennsylvania. But after years of regulatory uncertainty (compounded by legal warfare by radical environmentalists), Bechtel canceled the project in Pennsylvania, packed up, and moved about 200 miles west, building a $1.3 billion power plant in Columbiana County, Ohio.
To put it in Shapiro’s words, Pennsylvania is “losing to friggin’ Ohio.”
But this is more than just some petty rivalry between neighboring states. By a conservative estimate, Pennsylvania forfeited nearly 4,000 megawatts of generation capacity during the RGGI years. That’s enough electricity to power nearly 2 million homes.
RGGI’s ruinous spirit lives on in Shapiro’s Lightning Plan, which will be even more destructive than RGGI. Shapiro’s proposal includes two programs: the Pennsylvania Climate Emissions Reduction Act (PACER) and the Pennsylvania Reliable Energy Sustainability Standard (PRESS).
PACER is a cap-and-trade carbon tax scheme like RGGI. But rather than a regional model spread out over several states, PACER would concentrate its destructive forces solely within the confines of the commonwealth.
PRESS would more than triple Pennsylvania’s alternative energy mandate. To comply with the mandate, Pennsylvania would need to grow its wind capacity thirtyfold and solar capacity a hundredfold by 2035.
Combined, PRESS and PACER would wreak havoc on Pennsylvania’s already-high energy costs. Independent analysis estimates the combined cost to be more than $150 billion in new energy costs over ten years, more than doubling residential electricity bills.
Shapiro claims his plan will reduce bills, but his projections deserve scrutiny. The governor used the same modeling that his predecessor used to justify RGGI. But Wolf’s spitballing was off — way off. The modeled RGGI prices predicted a clearing price $4.01 per allowance in 2025, but the actual clearing prices was $26.73 in 2025 — sixfold higher than originally estimated.
Despite the plethora of bad policies, Pennsylvania remains well-positioned for an energy boom. The commonwealth is the number-one exporter of electricity and second only to Texas in natural gas production. A wave of new investment — roughly about $34 billion in power plant upgrades, conversions, and construction — emerged as data center demand surged and RGGI’s defeat became certain.
The lesson of the RGGI years is straightforward: Just the threat of the carbon tax scheme drove investment away right at the very moment Pennsylvania needed it the most. This production drought raised electricity prices and reduced grid reliability. Shapiro’s Lightning Plan will only exacerbate these issues and erase Pennsylvania’s competitive advantage as an energy-producing state.
The future of Pennsylvania energy looks bright, but only if we learn from our mistakes and avoid repeating them with just another rebranded boondoggle.
