Last week, a Pennsylvania State Senate Committee issued four pages of procedural objections about the Regional Greenhouse Gas Initiative (RGGI), a plan to reduce carbon pollution from power plants in the state. While the bureaucratic issues raised will be sorted out by the regulatory process and/or the courts, the committee letter skips over an urgent question in the RGGI debate — what choice is best for Pennsylvania’s coal plant communities?

The answer to that critical question is neither academic nor remote, as several coal plant communities are facing hard prospects right now.

One case in point is the Cheswick Generating Station in Allegheny County, which will shut down in April 2022. When closing Cheswick and two other coal plants in Maryland and Ohio, the owners cited “unfavorable economic conditions,” higher environmental compliance costs and an inability to compete with other energy sources like natural gas.

The Cheswick plant retirement is just the latest in a series of energy market-driven coal plant closures described in a recent report by the Ohio River Valley Institute (ORVI). The report tracked how a national market trend away from coal to natural gas, wind, solar and other less expensive sources for producing electricity has dramatically impacted Pennsylvania. Coal-powered electricity’s share in the commonwealth has fallen from 57% in 2001, to 47% in 2010 and to 17% in 2019. Coal-fired electricity is projected to drop to a 4% share by 2030.

These market trends are unlikely to change because coal is just too expensive. A recent academic study on coal-fired power plant retirements in the U.S. found the current “all-in cost” of generating electricity from coal “is more than double” the cost of solar and wind, and “nearly double” the cost of natural gas. For example, the Cheswick plant operated at only 10% of its full capacity last year because there was so little demand for its high-cost, coal-generated electricity.

The report did more than chronicle this rapid transition in the energy markets; it also proposed solutions for how to deal with the consequences for coal plant workers and communities. Specifically, ORVI examined how RGGI funding has supported economic development and job creation in coal plant communities across the country. The report presents eight case studies, including six from states that have joined RGGI, to show how RGGI resources can be used to create jobs and boost communities affected by energy market changes away from coal. It makes a compelling case for joining RGGI to support Pennsylvania’s coal plant communities.

The ORVI report also took a deeper dive into the content of the more than 14,000 comments filed on the RGGI proposal in January 2021, with a more than 7-1 ratio in favor of RGGI. Pennsylvania energy leaders and Fortune 500 companies filed supportive comments, and many made a compelling business case for why coal plant communities would particularly benefit from RGGI. As one energy company noted, “with or without RGGI, Pennsylvania coal plants will be challenged and face an uncertain future. With RGGI, however, funds are available to ease this transition and provide opportunities for the future without having to impact the taxpayer.”

It is encouraging that so many Pennsylvania businesses and citizens support RGGI. The Wolf administration has proposed devoting RGGI funding to an Energy Communities Trust Fund “to provide direct support to dislocated workers and communities experiencing impacts from the closure of existing power plants.”

To investigate the concept of using RGGI funds to support local economic development efforts, the ORVI report provided some “show me the money” research on how RGGI funds have already been used in coal plant communities in other states. It details six case studies where RGGI funding has been directly invested in coal plant communities to create jobs and develop economic strategies to replace lost coal plant jobs.

RGGI is not a panacea, and plenty of work and consensus building will be needed at the local level, but the experience of other states demonstrates how RGGI-funded activities can support local coal plant communities, including direct financing for site demolitions, retrofits and cleanups; replacing local tax revenues to support schools and municipalities; supplemental funding for state job training and placement for displaced workers; and assistance for local community planning, project development and support for public-private community investment strategies.

That provides a roadmap for job creation and strategic economic development approaches in coal plant communities. The Senate Committee letter offers no path forward on new economic development strategies beyond procedural objections to RGGI.

Because RGGI offers the potential for new funding and investments, the ORVI report helps clarify the fundamental question — what’s best for Pennsylvania’s coal plant communities?

Option A: Reject RGGI and allow market forces to shutter coal plants with little or no help to cushion job losses, provide site cleanup and replace lost local tax funding. Option B: Adopt RGGI and use a significant portion of new RGGI proceeds to create jobs and ease the transition for coal plant workers and local communities across the commonwealth.

The best choice for coal plant communities is clear.

J. Joseph Cullen is a fellow with the Ohio River Valley Institute, an independent, nonprofit research and communications center founded in 2020.

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