Shapiro's Role in Rising Energy Prices

Gov. Josh Shapiro seems concerned about Pennsylvanians’ energy bills – and rightfully so. The average Pennsylvania electricity bill has increased by more than 30% in the past four years.

Assuredly, PJM is no saint, but neither is Shapiro. The governor has done nothing to address energy affordability and the underlying forces driving up costs. If anything, he has only fueled higher costs and further stressed the electrical grid’s reliability. If he wants to cut costs, Shapiro must rethink his energy policies.

And he can begin with his misguided faith in cap-and-trade schemes like the Regional Greenhouse Gas Initiative (RGGI).

RGGI – the multistate compact that imposes a carbon tax on power generators – threatens Pennsylvania’s comparative advantage in energy. As the region’s leading net exporter of electricity, Pennsylvania relies heavily on its energy sector. Yet, RGGI would extract nearly $800 million in new taxes from the state’s leading industry.

As a candidate, Shapiro seemed like a RGGI skeptic. He promised an energy strategy that would “address climate change, protect and create energy jobs, and ensure Pennsylvania has reliable, affordable, and clean power for the long term.” Shapiro was unsure if RGGI “passes that test.”

Shapiro was right: Pennsylvania didn’t need RGGI. The Independent Fiscal Office (IFO) found that Pennsylvania’s power sector reduced emissions while growing power generation – all without RGGI.

For a moment, RGGI was on the ropes. In 2023, the Commonwealth Court ruled RGGI’s carbon tax unconstitutional. But rather than allow RGGI to die, Shapiro doubled down on the bad policy and appealed the decision.

RGGI became a bargaining chip for an equally damaging policy: the Pennsylvania Climate Emissions Reduction Act (PACER). PACER, like RGGI, would tax producers and push nearly $499 million in new tax burdens to Pennsylvanians. In turn, lawmakers would funnel these proceeds toward special interest groups hocking wind and solar power. Shapiro promised to “pull out of RGGI” if Pennsylvania lawmakers adopted his proposed alternative.

In addition to PACER, Shapiro proposed the Pennsylvania Reliable Energy Sustainability Standard (PRESS). PRESS would amend Pennsylvania’s current Alternative Energy Portfolio Standard, which mandates that 18% of electricity originate from sources like solar and wind. PRESS would up this to 35%, nearly doubling the state’s reliance on expensive, part-time energy sources that cannot power our full-time needs.

Self-reflection isn’t Shapiro’s strength, yet he could examine the harmful policies colleagues in Washington, D.C., have spearheaded.

President Joe Biden’s final days in office leave behind a path of destruction. From banning liquified natural gas to adopting unrealistic carbon-capture rules, the Biden administration seemed hellbent on undermining Pennsylvania’s energy production. Moreover, federal regulations continue to shutter Pennsylvania power plants, such as the recently decommissioned Homer City plant. Thanks to these harmful policies, the Pennsylvania grid – meaning the entire PJM region – is on a path to rolling blackouts.

America’s energy woes boil down to basic supply-and-demand economics. Consumer and commercial energy demand – especially with the rise of artificial intelligence and data centers – is drastically increasing. Lawmakers must focus on expanding the supply of reliable power and addressing regulatory impediments to energy abundance, such as permitting. At the same time, Shapiro and his eco-fundamentalist sycophants must abandon all heavy-handed tax and regulatory schemes that do nothing but increase the price of energy and weaken grid reliability.

Before Shapiro points fingers of blame, he should look in the mirror. Between RGGI, PACER, PRESS, and the other radical climate policies he openly supports, Shapiro’s alphabet soup of energy programs will enrich special interests at the expense of families and businesses in the commonwealth.

Shapiro must rise to the challenge and prioritize reliability, affordability, and competition. Otherwise, Pennsylvanians should brace themselves for years of rising energy costs.

André Béliveau is the Senior Manager of Energy Policy at the Commonwealth Foundation, Pennsylvania’s free-market think tank.