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New Hampshire lawmakers are looking at whether to repeal that state’s participation in the Regional Greenhouse Gas Initiative, or RGGI. Environmentalists say the carbon cap-and-trade program encompassing 10 states, including Maine, is a success. But some businesses say the program is flawed. And some Republican lawmakers say the program never should have started in the first place. New Hampshire Public Radio’s Amy Quinton reports.
RGGI is designed to reduce carbon dioxide emissions from power plants. Under the program, carbon dioxide allowances are sold at auction to utilities that can’t meet emission reduction goals.
If a company finds ways to reduce their carbon pollution, it can sell its excess allowances. The money generated at auction goes into a fund to improve energy efficiency in the state.
Republican Rep. Andrew Manuse of Derry is one of the sponsors of a bill to have the state withdraw from RGGI.
“Even if carbon dioxide emissions are a problem for the environment, and I’m not saying whether it is or isn’t, the Regional Greenhouse Gas Initiative has not substantially impacted the reduction of emissions, yet it has had a significant negative impact on economic growth,” Manuse says.
Not unexpectedly, RGGI has affected electric rates for both consumers and businesses. The state’s largest utility, Public Service of New Hampshire, estimates RGGI costs the average residential customer about 36-cents a month.
For businesses, especially those that use considerably more electricity, the costs can add up. Jeff Rose is with BAE Systems, the state’s largest manufacturer. “We’ll just say that when something impacts the average residential consumer–you know, pennies or dollars over the course of a month–you can add a couple of zeros onto that when it talks about the impact that it has to BAE Systems,” Rose says.
“For a little amount of money from ratepayers it’s getting really good results on the ground,” says Jim O’Brien with Conservation New Hampshire. He calls the program a success. He points to the millions of dollars the program has created for energy efficiency projects in the state.
“It’s been sending money to municipalities to retrofit buildings, it’s been sending money to lower income individuals to put insulation and new windows in the their homes, and it’s also been sending money to businesses, both large and small to do energy audits and to look at ways that those businesses can reduce their costs and their energy bills,” O’Brien says.
Since 2008, RGGI has brought $28.2 million into New Hampshire from quarterly auctions. The Public Utilities Commission, which distributes those funds, says the money has gone to more than 30 different energy efficiency programs or projects.
But some in the business community argue that money is not being distributed wisely. The Business and Industry Association has not taken a formal position on whether the legislature should repeal RGGI. It supported RGGI in the past.
But Vice President Michael Liccata says some BIA members feel funding is going to projects that don’t lower greenhouse gas emissions as much as possible.
“That’s sort of the frustration that I hear from a lot of our very large members, is this difficulty in accessing these funds, and then they see other projects, all well-intentioned, good projects, but at the end of the day are not specifically saving energy,” Licatta says.
Liccata points to grants that have gone to education and outreach, energy audits, and others that don’t directly save kilowatt hours.
Jeffrey Rose with BAE Systems says his company applied for, but did not receive, grant money for energy projects. He says so have dozens of other businesses.
“There’s been very few hardline businesses that have actually directly received funding back from the RGGI fund,” Rose says. “So I do think that it’s going to be important to review how the program has been funded, where those funds have gone, and has it been the most efficient or effective use of those resources.”
State environmental officials argue that it would be a big mistake to repeal RGGI. Bob Scott is Air Resources Director for the Department of Environmental Services. He says dropping out of RGGI will have a deeper impact on the economy than staying in.
That’s because New Hampshire is part of the ISO New England power grid, which oversees all of New England’s wholesale electricity distribution. Scott says because RGGI is a regional program, electricity rates will remain high.
“If we drop out of RGGI, being part of ISO New England, and particularly Massachusetts and Connecticut being in RGGI still, that will still reflect somewhat, a small amount, on rates for anybody who buys power off the grid,” Scott says.
And dropping out would mean New Hampshire would receive no money from auctions to use for energy efficiency projects.
Ultimately, RGGI’s goal is to reduce greenhouse gas emissions. A year after the program was put in place, emissions dropped 34 percent, to approximately 120 million tons of carbon dioxide.
That’s well below the regional cap. But DES’s Bob Scott says only some of that can be credited to RGGI. “Obviously the economy has a lot to do with that, similarly the change of price for natural gas, natural gas being so much cheaper, it’s less carbon intensive so more utilities are burning natural gas than before.”
State Republicans say now that the program has been in place for two years, it’s a good time to look at all the pros and cons. Rep. Jim Garrity of Atkinson, who chairs the House Science, Technology, and Energy Committee, says RGGI has a good chance of getting repealed.
“Unofficially, just hearing talk in the hallways, I would say conceptually probably better than 50/50, at least in the House,” Garrity says.
It will likely face a lively debate in the Senate as well. Republicans hold the majority there too. But both the Senate president and the chair of the Energy and Natural Resources Committee were original sponsors of the bill that enacted RGGI.
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