Legal bills top $4.2M in fight over key Pa. climate change program

This story originally appeared on Spotlight PA.

Pennsylvania lawmakers have spent more than $4.2 million on legal bills as they fight over the commonwealth’s participation in a multistate effort to combat climate change, records obtained by Spotlight PA show.

The battle over the Regional Greenhouse Gas Initiative (RGGI) began in 2019 when former Democratic Gov. Tom Wolf issued an executive order that directed the commonwealth to join the cap-and-trade program.

Under RGGI, roughly a dozen states agree to limit the total carbon emissions that energy producers within their borders can generate yearly. To emit carbon, most power plants in participating states have to purchase allowances at quarterly auctions, at prices that the states set.

States can use the revenue from those sales for climate mitigation efforts, electricity cost reductions for consumers, or other ventures; because of the way Wolf justified Pennsylvania’s entry into RGGI, the state would be required to put allowance revenue into the Clean Air Fund, which supports pollution reduction efforts.

Currently, two active lawsuits seek to invalidate the state’s entry into RGGI: one filed by energy companies and labor unions, and the other by legislative Republicans. Both parties scored victories last November when Commonwealth Court struck down the state’s participation. The Shapiro administration has appealed both decisions to the state Supreme Court.

In recent years, these appellate courts — which handle cases involving state government — have been asked to weigh in on several major policy disputes that began in the legislature. That includes ultimately picking Pennsylvania’s current congressional map.

Louis Rulli, a law professor at the University of Pennsylvania, says he’s not surprised by the number of disagreements between the executive branch and the legislature, especially considering the divided party control. However, using the judicial system to litigate those decisions can come at a cost.

“When the parties can’t come to [an] agreement, they resort to these tools. They’re not improper tools but there’s a cost to those tools and Pennsylvanians pay for that,” Rulli told Spotlight PA.

Between October 2019 — when Wolf issued his executive order — and June of this year, state Senate Republicans paid McNees Wallace & Nurick $1.2 million to argue that Wolf exceeded his executive authority when he joined RGGI.

Lawyers charged the caucus for drafting petitions, research, and arguing the case in front of Commonwealth Court, according to invoices. Those efforts included serving a subpoena to the executive director of RGGI, Inc., the nonprofit that runs RGGI.

State House Republicans spent just under $370,000 on legal fees to Post & Schell, P.C. during the same period. Records show that their counsel collaborated with the state Senate on the RGGI lawsuit regarding executive authority.

Meanwhile, the governor’s office has paid over $2.7 million to Ballard Spahr for work on RGGI lawsuits during that same period. Wolf supported RGGI, but Democratic Gov. Josh Shapiro has walked a fine line on the program — defending a governor’s right to make executive decisions while pitching his own RGGI alternative.

Outside counsel for the governor’s office worked on litigation for both cases, collaborating with agencies including the Department of Environmental Protection and communicating with environmental advocacy groups such as the Clean Air Council. The latter group was one of several that recently won the right to intervene in the challenges.

A spokesperson for Shapiro did not return a request for comment.

In a statement, state Senate Majority Leader Joe Pittman (R., Indiana) blamed both Wolf and Shapiro for forcing the legislature to continue funding legal battles between the two branches of government and to “spend taxpayer dollars” on the court case.

At the heart of both cases is whether the regulations imposed by RGGI constitute a tax or a licensing fee. Opponents of the program say that an emission limit on energy companies is tantamount to a tax, which would make Wolf’s unilateral move to join the group unconstitutional, as only the legislature has the power to levy taxes.

Supporters of the program argue the federal Clean Air Act gave Wolf the right to join RGGI and say that imposing an emission limit on energy companies qualifies as a fee, which the governor can implement without the legislature’s consent.

During his campaign for governor, Shapiro did not take a firm position on RGGI. Once in office, he assembled a working group to determine if RGGI would help achieve the state’s climate goals, create energy jobs, and benefit consumers.

While the group did not find consensus on the initiative itself, it said in a memo that a cap-and-trade program would be the best way for the state to meet those goals.

Last March, Shapiro proposed just that. He called for the legislature to pass a RGGI alternative, describing the proposal, the Pennsylvania Climate Emission Reduction Act, as a Pennsylvania-specific cap-and-trade program.

Shapiro says the program would allow the state to determine its own cap, rather than one set collectively by RGGI states, and choose how to use the allowance revenue.

Democrats have introduced Shapiro’s proposal as legislation in both chambers, but neither bill has so far been considered.