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RGGI repeal?
Republicans and Democrats divided on energy issue

02/05/15



The Regional Greenhouse Gas Initiative, adopted in 2008 as bipartisan legislation, has become a partisan issue recently as Republicans try to repeal the law that’s meant to reduce greenhouse gas emissions.

 
What RGGI proponents say
The regional market-based program (RGGI, usually pronounced “Reggie”) assigns a certain number of carbon dioxide allowances to each state that participates, which they can trade, sell or use. For example, Public Service of New Hampshire can cut emissions by lowering carbon emissions, reducing energy generation or purchasing credits from any emitter in the initiative. In 2014, all states had a cap of 91 million short tons, said State Rep. Suzanne Harvey, D-Nashua, a bill co-sponsor in 2008. The cap then declines by 2.5 percent each year from 2015 to 2020, according to rggi.org.
Harvey is fighting the repeal.
“We, the sponsors [in 2008] had many, many stakeholder meetings. We called in all the experts we could gather around the state and listened to the experts about joining RGGI,” Harvey said.
Periodic auctions are held to buy and sell carbon dioxide allowances to any entity. For example, if there is another emitter in a different state that needs to lower emissions, it can purchase allowances from New Hampshire. A coal plant needing to run 24/7 can purchase allowances to offset the dirt it is putting in the air, and these allowances can be purchased from, for example, a wind farm, Harvey said.
“It has actually done quite well. We’ve lowered emissions,” Harvey said.
The first dollar of each credit goes back to the ratepayer, and credits are now selling for $4 or $5 each, Harvey said.
“It amounts to a whole lot of money,” she said. “Money first goes back to the ratepayer from the auction. And secondly, through the core program of electricity companies in the state, money is distributed to low-income homeowners for energy-efficiency projects. Then municipalities can send proposals into the fund for energy-efficiency projects also, in municipal buildings. Only then, if money is left over, private homeowners who are not low-income can apply for grants for energy-efficiency.”
That money amounts to about $15 million to $20 million a year in allowance auction revenues, said Mike Fitzgerald, assistant director of the Air Resources Division with the New Hampshire Department of Environmental Services. Fitzgerald said that if RGGI is repealed, the state would lose out economically, “very significantly.”
Energy-efficiency projects for low-income families can include projects like installing more efficient windows and doors, while municipalities can use the money for schools or any town-owned buildings, Harvey said.
“Energy efficiency is really the goal. It’s the best way, a lot of us believe, to spend money,” Harvey said. 
 
What the opponents say
State Rep. Dick Barry, R-Merrimack, is one of the main sponsors of the bill to repeal the law. He was also one of the co-sponsors of the 2008 legislation, when the Granite State joined eight other states in the Northeast in RGGI.
“The concept is not bad, it’s the implementation of it, and we are losing sight of the big picture,” Barry said. “We’re not spending enough time on how to reduce the cost of energy overall.”
Barry says RGGI is actually costing the ratepayer money. He said energy is a major driver of the economy, and with New Hampshire and New England having the highest cost of energy in the country, RGGI has been doing well to work toward energy efficiency, but the root of the problem is the cost of energy. People think RGGI doesn’t cost them, Barry said, but they can see it in our energy bills.
“We’re reaching the law of diminishing returns, unless we do something about that. And that money comes out of the pockets of the ratepayers,” Barry said, noting that in order for utilities to buy offsets, they have to charge the ratepayers for electricity.
Barry said the agency is expected to lose $8 million in state-restricted revenue and $2 million in local revenue this year, and those figures could climb to $20 million and $25 million in the next few years. Barry says his hope is to take the focus off RGGI and put together a serious energy plan that addresses the cost of energy. He also wants a focus on clean, renewable and reliable energy.
“As we lower the cost of energy we will drive the economy, which is more jobs,” Barry said.
Harvey says for those who want to keep RGGI, if New Hampshire wants out, Granite Staters will still be paying the same electricity rates without the benefit of an auction fund that eight other states are getting and using.
“We still pay the rate, but don’t get any benefits,” Harvey said. “If people care about the environment, and the air we breathe, carbon dioxide is proven to be unhealthy for asthma and other illnesses, and it’s also bad for the environment. Anything we can do to lower our carbon emissions, and move toward cleaner producers of energy like wind and solar, the better off we’ll all be for generations to come. We need to be good ancestors and care about the future generations, and this is one way we can do that.”
 
Future impact
Fitzgerald concurred with Harvey on both financial and environmental fronts, should RGGI be repealed. In addition to the state’s losing out on about $15 million to $20 million a year in allowance auction revenues, Fitzgerald said electricity rates would increase by ¾ of a percent.
Currently, the Environmental Protection Agency is working toward creating the Clean Power Plan, which is expected to be finalized this summer and implemented in 2018. 
“RGGI would be our method of complying with that federal program. It would be very difficult for New Hampshire to meet the federal requirements absent RGGI,” Fitzgerald said.
Fitzgerald also pointed to the economic benefits of investing in energy-efficiency, which goes toward reduced demand and reduced rates.
“We would lose out on that as well. Those investments provide jobs and economic growth in the state,” Fitzgerald said. “Pulling out of RGGI would have negative impacts both environmentally and economically.” 
 
As seen in the February 5, 2015 issue of the Hippo.





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