RGGI’s Economic Benefits for Pennsylvania

Evergreen Collaborative
Project completed May 2023.

Evergreen Collaborative retained Synapse to evaluate the impacts of Pennsylvania’s participation in the Regional Greenhouse Gas Initiative (RGGI), beginning with a focus on economic impacts. RGGI is a cap and invest initiative of the northeastern US states that aims to reduce carbon pollution from the electric power sector. RGGI generates revenues for participating states that can be used to further advance clean energy deployment. The revenues from RGGI can be used to offset consumer energy costs through incentives for energy efficiency and other clean energy technologies.

Synapse conducted power system modeling using the EnCompass power planning software to quantify the impacts of Pennsylvania’s participation in RGGI. We analyzed residential electric rates and bills both with Pennsylvania participating in RGGI and with Pennsylvania not participating in RGGI, accounting for both RGGI’s impacts on wholesale power prices and the impacts of RGGI revenues on Pennsylvania consumers’ energy expenditures. We also studied the impact of RGGI participation on the deployment of clean energy resources in Pennsylvania and the resulting federal tax credits for clean energy brought into the state. As described in our report, our analysis demonstrated that Pennsylvania stands to benefit economically from participating in RGGI by generating revenues that exceed the impact on wholesale power prices and by increasing the amount of federal clean energy tax credit funding that flows to Pennsylvania. Notably, Pennsylvania realizes a cumulative $1.5 billion in electricity cost savings between 2025 and 2030 by participating in RGGI.