Gordon Tomb: Save the Homer City Power Plant

by Gordon Tomb

During his campaign, Gov. Josh Shapiro expressed concern over a new carbon tax initiated by his predecessor, Tom Wolf, noting the impact on energy jobs and already soaring energy prices.

“I have real concerns about the impact it will have on consumer prices, hurting families at a time when many are struggling really to put food on the table,” candidate Shapiro said, in reference to the tax.

But since taking office, Gov. Shapiro hasn’t worked with the legislature to oppose the carbon tax. The consequences are clear: Most recently, Pennsylvania’s largest coal-fired power plant, Homer City, is shutting down. With even more jobs and further increases in energy prices on the line, Pennsylvanians need their governor to block this tax on energy.

The tax is part of Pennsylvania’s proposed participation in the Regional Greenhouse Gas Initiative (RGGI) — currently tied up by lawsuits because Wolf acted without legislative approval. It adds an unnecessary burden to companies already under serious financial pressure.

In explaining the closing, Homer City’s owners pointed to economic factors like low natural gas prices and the rising price of coal, plus the added burden of federal regulations. The “ongoing uncertainty” caused by the state’s move toward joining the RGGI may be the straw that broke the camel’s back.

Businesses under financial stress need to be able to plan for a future in which they can operate, and not one where their work will be continually undermined. “RGGI will severely limit Homer City’s ability to plan long-term, and it will handcuff the business in making further investments with an uncertain regulatory future,” said plant owners.

“Since RGGI was initiated, we have seen disinvestment in the plants,” said Aric Baker, president of Local 459, International Brotherhood of Electrical Workers, which represents 2,000 workers, 40 percent of whom work in power plants and power-line maintenance. “The closing of Homer City will be a crushing blow to the community.”

Shapiro’s first state budget proposal includes more than $600 million in carbon-tax receipts, and he reportedly plans to hire staff to administer RGGI. His administration claims it’s not a backtrack on Shapiro’s RGGI campaign concerns, rather an accounting measure should it move forward.

However, he’s yet to answer how he’ll address the far-reaching consequences of RGGI — to jobs, communities, and families.

The Homer-Center School District receives more than $720,000 in tax revenue from the power plant, reports Gregg Kalemba, district business manager. The lost revenue requires a 14 percent tax increase if other measures are not taken. “It will be a difficult challenge to overcome its loss,” he said.

Mark Hilliard, president of the Indiana County Chamber of Commerce, said there have been challenges to finding alternative uses for the plant site, which has a connection to the power grid. “We were hoping to have more time to prepare for a closure so people could transition to new jobs rather than suffer unemployment.”

The plant’s economic contribution goes well beyond the 130 people directly employed, said Hilliard. Numbering in the thousands is the indirect employment of maintenance contractors, truck drivers, vendors, and others.

Most concerning is the impact of Homer City’s closure on energy prices and availability—especially at a time when Pennsylvania voters overwhelmingly believe the state’s most pressing issue regarding energy and the environment is rising energy costs.

The 2,000-megawatt Homer City plant, which invested $750 million in pollution controls in the past decade, produces enough electricity for two million homes. Responsibility for ensuring an adequate power supply resides with the PJM Interconnection, which has expressed concern about coal plants retiring before adequate replacement power is available.

“The impacts of this closure will be felt by communities throughout Indiana County and the entire region in Western Pennsylvania,” said state Sen. Joe Pittman, who represents workers at four coal-fired stations. “Beyond our area, this troubling news is a realization that we as a nation are at risk of losing the reliability of our power grid. Removing this source of electricity … will certainly not help to keep down costs for consumers.”

Homer City is among the first victims of RGGI — but may not be the last. As Rep. Jim Stuzzi (R-Indiana County) aptly puts it, “Like his predecessor… [Shapiro] has no plan to address the pending job losses in local communities, the inevitable rise in statewide energy prices and recognition of Pennsylvania’s existing natural resources as part of a balanced energy portfolio.”

Shapiro tacitly kills jobs and damages the region’s economy by allowing RGGI to stand. It’s past time to pull the plug.

This commentary was first published at Pittsburgh Post-Gazette, April 22, 2023, and can be accessed here.

Photo attribution:  Andre Carrotflower, CC BY-SA 4.0 <https://creativecommons.org/licenses/by-sa/4.0>, via Wikimedia Commons

Gordon Tomb is a senior fellow with the Commonwealth Foundation and a senior advisor with the CO2 Coalition in Arlington, Va.

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