Poverty, Energy, and RGGI

Despite living in one of the richest countries and one of the largest energy producers in the world, many Americans still struggle to pay their energy bills. Roughly 1 in 3 Americans report household energy insecurity, and over 10% admit to keeping their home at unsafe temperatures. 

Given Pennsylvania's status as the energy powerhouse of the northeast, we should be doing everything possible to create an environment for safe and affordable production. Instead, our leaders are doing the opposite. Governor Wolf recently issued an executive order to join the Regional Greenhouse Gas Initiative (RGGI), a cap and trade policy that increases energy costs. For Pennsylvanians already struggling to pay for power, paying the additional price for RGGI just isn’t an option. 

Worse yet, there’s ample proof that RGGI doesn’t significantly reduce emissions. Pennsylvania is already decreasing emissions, with an average decrease of almost 3% a year over the last decade. There’s no sense in trading in something that does work for something that doesn’t.

For context, power is considered affordable when it equals roughly 6% of the total household income. For the poorest Pennsylvanians, over a fourth of their income went to their energy bill in 2018. In fact, residents had to make roughly twice the poverty line for energy to be considered affordable.1

In Pennsylvania, roughly 1.3 million households fall below twice the poverty line and struggle to power their homes—more than the total number of households in Pittsburgh and Philadelphia combined. RGGI will make energy even less affordable. 

The Low-Income Home Energy Assistance Program (LIHEAP)—a federal program that provides grants to low-income families in order to ease the energy burden—tried to address this problem. However, for Pennsylvania families, there is a gap between the cut-off for LIHEAP—150% of the poverty line—and when energy becomes affordable. 

Chart: Pennsylvania Energy Asistance Gap

According to David T. Stevenson of the Caesar Rodney Institute, the RGGI current auction prices could increase Pennsylvanian electric bills by $412 million. That’s equal to almost $90 per household. For families that are already struggling, any increase is too much. 

Fortunately for Pennsylvanians, lawmakers have already introduced legislation to prevent this. Senate Bill 905 (Senator Pittman) and House Bill 2025 (Representative Struzzi), will require the Pennsylvania DEP (Department of Environmental Protection) to submit their plan to the legislature for approval prior to implementing a carbon tax or joining the RGGI.  That could delay the process and give lawmakers pause on its impact.

On top of failing increasing energy bills for low-income residents, RGGI also stunts industry, slows job growth, and burdens Pennsylvanians. Even the best intentions of lawmakers can’t overcome the fact that increasing energy costs does nothing but make it even more difficult for the poorest Pennsylvanians to survive, let alone escape poverty.

1. Federal poverty threshold equals $12,490 for a single person household. A single person in PA would have to make $23,106.50–24,980 for energy to be considered affordable.