From: Commonwealth Foundation
By: Joshua Schubert
Date: May 4, 2026
Six Years of Lost Investment Underline Danger of New State Energy Taxes
Summary
From 2019 to 2025, the looming implementation of the Regional Greenhouse Gas Initiative (RGGI) chilled investment in Pennsylvania’s electric grid. For six years, Pennsylvania teetered on fully implementing RGGI’s multistate cap-and-trade program, which imposes a carbon tax on power producers. New generation proposals plummeted by 38 percent, and generation projects fueled by natural gas collapsed by 65 percent—even as neighboring Ohio’s project pipeline grew. Developers who had proposed billions of dollars in new generation during the Marcellus Shale boom stopped developing new projects, while few of the existing proposals reached operation.
Despite strong opposition to RGGI, Gov. Josh Shapiro continues to champion a similar approach through the Lightning Plan, whose Pennsylvania Climate Emissions Reduction Act (PACER) and Pennsylvania Reliable Energy Sustainability Standard (PRESS) programs would cost Pennsylvania $157.2 billion and more than double residential electricity bills.
Key Points
Developers proposed 38 percent less new generation capacity in Pennsylvania (2019–24 vs. 2013–18), while Ohio’s project pipeline surged 33 percent. Generation proposals fueled by natural gas collapsed by 65 percent.
Pennsylvania experienced a significant uptick in proposed projects failing to convert to operable generation. The conversion rate fell from 73 percent to 9 percent during the RGGI period. Ohio’s conversion rate declined modestly, from 62 percent to 48 percent.
Pennsylvania forfeited an estimated 3,833 megawatts (MW) of generation capacity during the RGGI period. That loss exceeds the PJM Interconnection’s first-ever reliability shortfall by more than 80 percent.
The Lightning Plan would be far more costly to ratepayers than RGGI, imposing $157.2 billion in new electricity costs and more than doubling residential bills.
Shapiro’s claim that the Lightning Plan will reduce costs relies on similar flawed assumptions that led the previous administration to underestimate the cost of RGGI by a factor of seven. (continue reading)