RGGI news: DE wants out, PA doesn't want in, NH & NJ making progress

(Aside to non-USA readers: my apologies for all the two character state abbreviations, especially NH which here does not mean Northern Hemisphere! RGGI is our Regional Greenhouse Gas Initiative, a Cap and Trade program in the northeast USA.)

RGGI Region

Ten state RGGI Region

I wasn’t expecting to create a full post today after the New Hampshire senate Energy and Natural Resources committee’s public hearing on our RGGI exit bill, but there is enough news to make this post worthwhile.

The Delaware legislature has a bill of their own to get out of RGGI, support is growing in New Jersey, Pennsylvania looked, but decided to stay out of RGGI, and some concerns I had here in New Hampshire have been significantly alleviated.

Delaware: On April 6th, House Bill #86 was introduced and assigned to the Energy committee. Its long title, An Act to Amend Title 7 of the Delaware Code Relating to Terminating the Regional Greenhouse Gas Initiative and CO2 Emission Trading Program, won’t sell many books, but the main section of the bill is a bunch of “Whereas” statements and sums up current understanding pretty well:

WHEREAS, Delaware’s participation in the Regional Greenhouse Gas Initiative (RGGI) has a goal of reducing carbon dioxide (CO2) production; and

WHEREAS, the goal of RGGI is to reduce CO2 emissions by 10% by 2019 from Delaware electrical power plants over 25 megawatts in size; and

WHEREAS, Delaware has already far exceeded the goal of 10% reduction by 2019; and

WHEREAS, changes already in effect have reduced emissions 41%; and

WHEREAS, Delaware’s high cost of electricity is costing approximately $500 per home per year in higher energy costs; and

WHEREAS, employers leave the State or decide not to locate in Delaware due to its 50% higher electricity costs; and

WHEREAS, New Hampshire, New Jersey, and Maine are considering terminating; and

WHEREAS, the decade-long effort in Delaware is replaced by increased emissions in China every 68 seconds; and

WHEREAS, program revenues are collected and mostly spent by non-transparent, non-governmental organizations and the loss of this revenue will not significantly impact the State budget; and

WHEREAS, the impact of the energy efficiency improvements of the program are less than 1% of the unsubsidized annual energy efficiency improvements in the general economy attributable to normal market forces.

Good luck to them. The bill has three sponsors and several co-sponsors.

New Jersey: Support for RGGI exit bills has mostly followed party lines. That’s been a bit disappointing, especially in states where RGGI funds have been transferred to the state general fund instead of being reserved for energy conservation and efficiency work. In New Jersey, Democrat State Senator Paul Sarlo publicly announced his co-sponsorship of the repeal effort. Last month, Governor Christie criticized the program saying it may be hurting economic development. He may decide within within a month whether New Jersey should pull out of RGGI. (Christie is one of the governors who redirected RGGI funds to his state’s general fund.)

New Hampshire: I expected the Energy and Natural Resources committee would not vote in favor of our RGGI Exit bill and that two senior republicans would vote against it. One of them, Jeb Bradley, introduced a detailed amendment that replaces the current board that distributes RGGI funds. It also changes the exit strategy from the end of this year to when other states representing at least 10% of the carbon dioxide allowances leave RGGI. I.e. New Jersey leaves, we leave. Until then, we receive RGGI funds for power we purchase from RGGI regulated power plants. RGGI may not survive New Jersey leaving, so this amendment helps to encourage New Jersey, and it means that HB 519 may be passed by the committee next week when they reconvene. (More people wanted to speak at the hearing than there was time, so the committee recessed the hearing until next Thursday at 0900.)

My testimony had a large section on job creation, and compared the low emission sort of jobs RGGI encourages to another program, the NH Innovation Research Center which helps develop new technologies. It could create whole new industries which would require more power and hence make it harder to reach RGGI goals.

With Sen. Bradley’s support, the full senate may have a veto-proof majority.

Maine: I’m unable to confirm this, but Corey R. Lewandowski, th NH State Director of Americans for Prosperity, said Maine has also tapped RGGI funds for offsetting budget shortfalls. That tends to annoy voters so it may add support to Maine’s RGGI Exit bill. Of course, if no one knows about the funds transfer, it won’t have much impact.

Pennsylvania: I’m also unable to confirm this, but Lewandowski said Pennsylvania recently considered joining RGGI, but decided not to join.

30 thoughts on “RGGI news: DE wants out, PA doesn't want in, NH & NJ making progress

  1. Regret here in NZ both NI and SI and esp GW and HMW athough also in the newly defunct ARC still follow Government doctrine on our ETS scheme. Unknown are BoP, HB, NRC and TRC – maybe CRC are borderline

  2. Ric, I don’t see you reporting on anyone making the basic arguments that CO2 will not cause any measure of CAGW, that a little warming is much to be desired, and that CO2 is nothing but a beneficial trace gas that is great for plants (and thus for the economy).
    Did you?
    This is not to criticize your efforts, which in our benighted Northeast are much appreciated.
    /Mr Lynn

  3. There is a learning curve. You can’t recruit industry without them investigating energy rates. Any state that can offer economical energy, moderate cost of living, reduced regulation and good labor has a chance. I large facility needs to look at taxes. They can sting.

  4. One of the things that caught my eye:
    “especially in states where RGGI funds have been transferred to the state general fund instead of being reserved for energy conservation and efficiency work. ”
    Identical to the phenomenon of tax increases in California to ‘balance’ the budget. The money gets pooled into the General Fund and spent on anything but what it was raised for.
    And that is how I spell FLEECE.

  5. Mr Lynn says:
    April 21, 2011 at 6:49 pm
    > … the basic arguments that CO2 …
    Joe D’Aleo and I both mentioned CO2, its benefit to plants and little impact on climate.
    The RGGI Exit discussion is not about CO2. A few people plaintively remind the committee that it’s important, but virtually all of the testimony is about the wonderful works that RGGI money accomplishes and we can’t live without, or that RGGI is a stealth tax and costs ratepayers too much and has to go before it turns that have nots into have nothings. Job creation is very fashionable this legislative season, and that’s where our testimony has to go.
    Of course, I’d rather stick to the science, but RGGI is policy and politics now. The science appears to be settled, and the answer is “It’s the economy, stupid.”

  6. [RGGI] program revenues are collected and mostly spent by non-transparent, non-governmental organizations
    How does that work? People in the RGGI states pay higher prices for energy, and the extra revenue goes to NGO’s instead of into the state budget?
    What are they talking about? Is it that cap-and-trade profits go to financial houses with those corporate partnerships called “non-governmental organizations,” or does that term refer to environmental groups?

  7. Pat Frank says:
    April 21, 2011 at 7:44 pm (Edit)

    How does that work? People in the RGGI states pay higher prices for energy, and the extra revenue goes to NGO’s instead of into the state budget?

    Pretty much. Let’s stick with RGGI. They exist as RGGI, Inc and basically run the auctions, collect proceeds and then send them to the states. (After taking their not too big, not to small cut. They are organized as a non-profit business and are not government.
    Let me back up. The power producers, people who run electrical plants, may have to buy “carbon allowances” for each ton (silly American short ton, not metric tonne) of CO2 the release. Basically, if your plant produces more than 25 MW and uses fossil fuel, you buy. Allowances can come from either RGGI Inc’s quarterly auction or from someone who bought some for speculation. Proceeds from the auction go back to the states. In New Hampshire, the money goes to a state agency that solicits proposals from anyone who has a good use for the money, and then money is transferred to the winners.
    The winners can be anything from a group that helps insulate buildings for people who can’t afford it to farms and manufacturers, to the power producers who collect the RGGI funds from their own customers.
    The power producers can quickly raise their rates independently of what the allowances cost them, so the power distributers will pay rates that may not match the price changes from their

  8. if anyone finds articles on RGGI funds being diverted, post them here and then we can send the thread off to everyone we know:
    March 2010: Reuters: Timothy Gardner: NJ latest U.S. state to raid carbon auction funds
    NJ moves $65 mln from climate fund to general fund
    Money came from Regional Greenhouse Gas Initiative
    New Jersey has become the latest state in a regional cap-and-trade market on greenhouse gases to take money meant to support clean energy programs to help ease its budget deficit…
    New York Gov. David Paterson decided last year to use $90 million from RGGI auctions to help ease that state’s deficit…
    ths was originally headlined “Facing Deficits, States Tap Into Environmental Fund” as u will see at the very top of your browser if u click on the link. it was linked to on Treehugger with that headline. guess the new headline was less likely to inflame the public!
    November 2010: NYT: Mireya Navarro: States Diverting Money From Climate Initiative
    In New Hampshire, the state took $3.1 million from a similar environmental fund…
    At least three financially troubled states have discovered in the Regional Greenhouse Gas Initiative, a cap-and-trade system, a convenient pool of money that can be drawn on to help balance state budgets…
    Critics say that diverting money from the fund for general spending, instead of using it on emissions control and energy savings, makes the initiative little more than a hidden tax on electricity…
    “The states are so broke that it’s going to be unbelievably difficult for them to stop this program,” said Leigh Raymond, the associate director of the Climate Change Research Center at Purdue University. “They’re desperate for money.”
    Facing deficits, states tap into environmental fund

  9. The real beauty of the scheme is that you can earn credits for doing nothing. Leave your trees in place rather than cut them down, you get credits. It doesn’t matter that you were not planning to cut them down anyways, rather to let them grow until they were bigger. Then, after getting paid to leave them standing for many years, you will cut them down, pocket the profits after having been paid twice for growing the same trees once.
    Like paying farmers not to plant crops, but on a much larger scale. Watch for environmental companies to start buying woodlands as investment, and using the carbon offsets to pay for it. Once the woodlands are mature, they cut the crop, take the profits, then replant and start collecting all over again. All paid for through your power rates, except you only get to share the costs, not the profits.

  10. As a Brit I hesitate to comment on US politics.
    But last Fall I hired a car and travelled up into Vermont and Maine.
    Absolutely stunning. Brilliant time.
    Now, I believe New England is pretty much in the eco-loon camp. So generally I kept my own counsel. But it happened no less than three times that my wife & I just happened to be in a bar when we weren’t driving, someone picked up on our accent and started chatting to us.
    When conversation drifted towards Government / Climate or whatever, I sneaked in a comment about Al Gore or the EPA or CO2. And every time it seemed to hit a nerve, because all the regulars started chiming in about how it was all a hoax to raise taxes. How Gore is a self-serving idiot. The whole thing. And I don’t think they were just being chummy to visitors! They got quite emphatic. And in every case, at least one of the regulars had done his homework and could quote facts and figures.
    Now, I was probably just lucky. In a different bar, they might have tarred and feathered me and rode me out of town on a rail.
    But, based on my completely un-scientific snapshots, there are quite a lot of folks in rural / small town Vermont & Maine who just don’t buy the cAGW religion.
    Maybe it’s the kind of bars that I get attracted to……

  11. Good to see more and more people and states coming to their senses. Here in Aus, Gillard is still trying to “sell” a “price on carbon”, but she is losing public support when we see advisers like Ross “Gold Mine” Garnaut being out classed by some ordinary joe off the street on national TV. Classic FAIL!
    Sorry Anthony and Mods, this is OT. AndiC, out of curiosity I clicked your link. How are ya matey? Used to work with you in Wellington, New Zealand. Glad to see you not falling for the man-made CO2 induced AGW hogwash.

  12. Yes, I really live in Delaware. We are a small state, so when two automobile assembly plants, a local refinery, and other industries closed in the recent past, it hit us hard. To their credit, state government has been working to bring industry and jobs back into the state. They will be painfully aware of the feedback from business that chose NOT to locate here. Lets hope that is enough for them to opt OUT of the regional Cap and Trade scheme that is RGGI.
    Thank you Ric Werme for the update on regional perspective, and to Anthony for WUWT and all he has done.

  13. While I do not claim any expertise in RGGI, since I live in NJ I have several observations:
    I have noticed that NJ has diverted funds to the general account. While I am totally against RGGI, I would prefer that the funds be used in this way rather than wasting them on stupid green initiatives like subsidizing solar panels and windmills. At least the benefits are going back to the taxpayer. The Dem controlled legislature in NJ keep trying to re-instate a millionairs that starts at several hundred thousand dollars income to balance the budget and send business to our neighbors. It was reported that our electricity generation companies are required to buy energy from solar panels at a rate up to 35 cents/kw. This is the false subsidy that has driven electricity rates up to 18 cents/kwh.
    The other observation is that these so called “green” energy produces are offering discounted rates to sign up new customers, I get a letter every week from them. They have even invaded our churches with promises to give kick backs to the church if the members sign up for this “discounted” energy. How can we prosper with this manipulated energy economy?

  14. Dave in Delaware
    I believe that the idle Del city refinery has been purchased and is in the process of getting back on line. I don’t remember his name, but I understand that the purchaser buys refineries when they are on the rocks and sells them later when there are good times.
    Maybe the State will not be on the refineries’ back so much now that they need jobs. I used to read constant negative editorials about the refinery in the Wilmington Journal.

  15. “I don’t care what the people say, thirty-six bits are here to stay!” (LCG to VAX honchos) A believer in the nine-bit-byte gets my attention every time. What about NY? Isn’t NY on the right side of anything? There are many intelligent, logical, honest, people in NY, and yet…
    [Reply: “If it doesn’t have 36 bits, you’re not playing with a full DEC!”
    Aside to all readers: these are references to my bio’s reference to PDP-10. There will never be another computer that is recalled with as much fondness by its programmers’ community. We will bemuse people to the end of our days, and I hope much longer.
    Oh – New York. RGGI was Gov. Pataki’s doing, but the New Jersey folks, unable to get some information from New Jersey, have gotten it from New York. I haven’t heard of any legislative effort yet. However, see http://www.americansforprosperity.org/110310-november-speaks-new-york%E2%80%99s-nineteenth-district-rejects-hall-cap-and-trade ]

  16. Martin Brumby–I share your sentiments. As a native Vermonter I can amplify your observations. There is a large eco-loon sensibilty here, much related to an influx of naive, earth-hugging hippies from the early 1960’s. Having few marketable skills these folks and their progeny assiduously and successfully took up local and state elective offices. The result is the likes of Governor Howard Dean (son of a wealthy NY City stockbroker) and hundreds of similar conceited, smug, arrogant long-term office holders who have formalized the “Peoples’ Republic of VT”. We are now a state with a very high tax burden, a large public sector, a poor business environment, and a huge deficit…not a pretty picture save for our bucolic topography. You might wonder how the natives let this happen. Well, Vermonters by nature are/were ‘live and let live’ types. No one seriously could have imagined that any sane person would ever enact by legislation and subtle rule-making the current nasty state of affairs…when you warm the pot of water slowly the frog doesn’t notice the boiling point until it’s too late. There are three groups here in VT- The political and chattering class who inhabit Burlington where our state university resides and our capitol 50 miles east in Montpelier and this group promulgates and implements the statist-agenda. Second are wealthy retirees and refugees from Manhattan and Connecticut who adore our landscape and sympathize with the first group. If you have a chance visit some oases of gentility such as Landgrove, Dorset, Woodstock, Barnard, and Greensboro…lots of timbered mansions at the ends of winding dirt roads. And finally there is the majority of very average folks struggling to make ends meet about which the first two groups could care less, while erecting their eco-utopia. If you took Chittenden County where Burlington is out of the statistics you would find VT to be really struggling, and you will have no trouble finding persons you describe who were so willing to share their true feelings with you. Yes, you could have stopped in some places and risked being tarred-feathered…Norwich, across the border from Dartmouth College in Hanover, NH, voted 93% for Obama in 2008 and you would be advised to keep your thoughts to yourself there. Please visit again, we need all the outside income we can capture, many of us would love to share our feelings with a kindred soul.

  17. Martin Brumby says:
    April 22, 2011 at 1:18 am
    don’t know much about maine. know quite a bit about vermont.
    there are two groups of people in vermont: 1: vermonters. I call them locals 2: city folks ( they are week end visitors fron NYC,westchester, providence, Boston and the like. The second crowd has more money. can pay electricity rate, if they increased fivefold. vermonters are regular folks. The kind I like, and they are the ones you came across.

  18. Dave in Delaware says:
    April 22, 2011 at 4:18 am
    should have signed that as
    Dave in DE
    Years ago (1976-1979) I was stationed in Lewes. Lived in Harbeson not to far from Georgetown & Millsboro. My son was born in Lewes.

  19. Thanks Rick, I was unaware of AFP.
    BTW, I still have my orange t-shirt (featuring the 36 bit quote) from the 1982 spring DECUS in NO, LA.

  20. Ric Werme says:
    April 21, 2011 at 7:42 pm
    . . .Of course, I’d rather stick to the science, but RGGI is policy and politics now. The science appears to be settled, and the answer is “It’s the economy, stupid.”

    And I assume if you question ‘the science’ some will label you a ‘kook’ and ‘denier’.
    But it is vitally important that these legislators hear from credible citizens that the fundamental premise behind these ‘greenhouse gas’ initiatives is false, that there is no evidence whatsoever that man-made CO2 has any adverse effect on the climate, that the science is not settled, and that the IPCC was created to promote a foregone conclusion, not to objectively review the scientific literature.
    Maybe hand out copies of Roy Spencer’s book, or at least Richard Lindzen’s terrific little essay, “A Case Against Precipitous Climate Action,” http://wattsupwiththat.com/2011/01/17/richard-lindzen-a-case-against-precipitous-climate-action/
    The lure of additional tax revenues is hard to resist, but learning that a tax scheme is based upon a lie can make it much harder to justify.
    /Mr Lynn

  21. The only objection I have to this post is the description of RGGI as a cap and trade program. It is a cap and auction program in which the generating companies buy allowances at a quarterly auction and that is entirely different. I doubt that there has been any significant trading whatsoever because there is such a large surplus of allowances due to the economic downturn and subsequent emissions reductions. One other detail supporting the characterization of this as a stealth tax is the fact that allowance holdings are all secret, with the hope that with the added uncertainty the prices will be higher. In fact the price at auction lately has been at the minimum value established for the tax.

  22. CNY Roger says:
    April 22, 2011 at 2:06 pm (Edit)
    > …. It is a cap and auction program
    It’s hardly an auction now – the sales price has been preordained as the auction floor price. No one is bidding any higher. However, suppose the economy actually improves and the cap starts lowering as planned. (They may be talking about resetting the cap, clearly it’s too high now!)
    It doesn’t take much excess demand to trigger a big resumption of speculation. It certainly won’t be this year – the producers may have nearly all the allowances they’ll need even though the first auction was oversubscribed by 10%. The first auction last year was oversubscribed by 130%, and that got absorbed in the next couple.
    I think states will be surprised at how little RGGI will bring in this year.

  23. What you folks up in the N/E states need to realize now and right now is, this RGGI is an inter-governmental signatory and (NGO) operation. Go to: http://www.rggi.org and http://en.wikipedia.org/wiki/Regional_Greenhouse_Gas_Initiative
    This same initiative is spread through out the USA, Canada and they are trying to drag Mexico in on it as well. AFP has it right but the citizens need to get the word out to neighbors, educate them and eliminate this eco-con job operation. Imagine, paying to breath air in this world?

  24. Ric Werme,
    I see that AndiC wrote on April 21, 2011 at 6:29 pm

    Regret here in NZ both NI and SI and esp GW and HMW athough also in the newly defunct ARC still follow Government doctrine on our ETS scheme. Unknown are BoP, HB, NRC and TRC – maybe CRC are borderline

    May I point out that NZ hominids, (they being but a tiny fraction of the sheep-fauna there), whom I’ve encountered in several visits to their very fair lands, do have a confronting sense of humour. However, this guy is I think a bit sus. My experience is that NZ hominids born in say the NI, claim that they come from the ML (= Main-Land). And, guess wot, if they come from the SI, vice versa. So, this guy is a tad unusual.
    If you ever go there, be warned that they have a strange form of spoken English. For instance, the number 6, is pronounced sucks. But, it is well putting-up-with, because for instance the underground “black-water rafting’ on the NI, and the Shotover River rafting and just getting there on the SI is wow!

  25. Bob_FJ says:
    April 23, 2011 at 11:33 pm
    ………………….this guy is I think a bit sus……………..

    Hi Bob
    Sorry if you think I’m a bit “sus”. I am from the NI – Upper Hutt to be precise, and regret I have never heard any North Islander ever claim to be a Mainlander – something very South Island – they even have a cheese named for it
    Usually it is the warmist proponents calling me sus, so this is new to me
    Savouring the warmth the new-found aclaim brings!!!
    Andy from UH, NI, NZ

  26. “Bob_FJ says:
    April 23, 2011 at 11:33 pm”
    In Nuh Zilund “Main Land” is ALWAYS considered to be South, as in the main South Island of NZ.
    Here is some Nuh Zilund for you; Hey, my puku (Stomach) is empty, gimme some kai (Food).

  27. Andy and Patrick,
    Sorrry, but after being the butt of some NZ humour, and insincere sympathy especially on the SI when learning that I come from Melbourne, I may have exaggerated slightly. On the NI, a good few years after, I still remain endeared to two subterranean tour guides whom demonstrated that by sticking ones head inside small hollows in the rock, one could have an enjoyable talk. NI-ers, seem to be relatively harmless.

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