Guest post by Ric Werme

It’s time for an update on the efforts of states interested in leaving RGGI, the Regional Greenhouse Gas Initiative. RGGI is a Cap and Trade system set up by ten northeastern states to reduce CO2 emissions by 10% by the year 2018. In the past year several states have considered pulling out, see the list of past stories below or see my web pages that cover all the action.

This post updates the recent efforts of the states actively debating whether they should stay or leave. States not mentioned below are staying in RGGI for the foreseeable future.

New Hampshire

I had hoped to have some firm news on New Hampshire because our legislative session ended at the end of June. Things started out well with the House voting with a veto-proof margin to leave RGGI. The senate agreed, but was one vote shy of a veto-proof margin, and since Governor Lynch had announced he would veto the bill, the senate vote wasn’t good enough. Senator Jeb Bradley submitted an alternate bill that kept the state in RGGI but returned most of the CO₂ allowance revenue to the rate payers. While that did get one extra vote in the senate, the house insisted on their bill.

I’ll skip the sausage making period that ensued, it wasn’t pretty and ultimately made no difference. As things stand now, the bill was sent to the governor, he vetoed it, and the legislature is no longer in session. When they return they will talk and possibly have a vote to override the veto. No one is expecting the the senate to change the vote, though I may send members a few Emails over the summer.

New Jersey

New Jersey had a couple bills to withdraw from RGGI, but the governor made them moot when he announced he was withdrawing the state from RGGI. I never knew it was so easy! Apparently the original legislation said the state may join RGGI and that it should do various other things. This allowed Gov. Christie to decide he needn’t keep doing those things, much to the surprise of the legislature.

So other legislators introduced bills to adjust the language of the original to make it require New Jersey be in RGGI and they passed, but not with veto proof majorities. Gov Christie is certain to veto them, and the next step may be in the courts.

Meanwhile Christie has stated there will be no new nuclear and coal based power plants in New Jersey, and emphasized his support for solar and wind projects (and especially off-shore wind). So energy issues will be at the forefront of statewide discussions for some time. Oh, he says no hydrofracking for natural gas development either.

New York

RGGI was the brainchild of Gov. Pataki. He was such a force that he had RGGI headquarters built in New York City (likely the logical place anyway) and committed New York to be in RGGI without enabling legislation.

This little detail has been ignored until late last month when Americans for Prosperity member Lisa Thrun et al filed a lawsuit alleging this violated both the state and federal constitutions.

The state constitution mandates that only the legislative branch can create new taxes in order to give representatives of the state’s citizens a say. The governor can veto the tax, he can’t enact it. Whether “Carbon Dioxide Allowances” constitute a tax is uncertain, but in 2010 Gov Paterson transferred $90 million of RGGI funds to the state’s general fund to help balance the budget. Sounds like a tax….

The federal issue is that states may only create interstate compacts with the consent of the US Congress. RGGI and the region’s states have never asked for Congressional permission. This is a very basic part of US Constitutional Law, and I’m surprised it has taken this long to see it used in a lawsuit. It may be that people who wanted to use it figured Congress would pass enabling legislation before a court wrote an injunction based on it. Oh wait a minute – not only has it been used before, the present case is using a lot of text from a 2009 case – see 2009 WUWT post Electric Utility sues New York over CO₂ regulation.

The case was about the utility griping that the law (err, the rules) didn’t allow them to pass on all the allowance costs in a long term contract the state encouraged them to set up years before RGGI. It was settled with ConEd “volunteering” to purchase allowances much as they did for their own power plants and passing the costs on to the customer. A summary (with link to details) says

According to the proposed settlement, Con Edison (ConEd) will purchase any additional RGGI allowances on behalf of Indeck Corinth that are necessary to cover the plant’s compliance obligation beyond what the plant receives from DEC’s LTC [long-term contracts] allowance set-aside pool. ConEd will make a similar commitment to cover the compliance obligations of two other power plants with which the utility has LTCs (Selkirk Cogen Partners and Brooklyn Navy Yard Cogen Partners). In exchange, Indeck will drop the lawsuit. DEC will maintain the current LTC set-aside at 1.5 million allowances per year.

Sorry about the abbreviations, but note the lawsuit was dropped and hence the constitutional claims have not been tested. DEC is Department of Environmental Conservation, they administer RGGI in New York.

Oh, I see, it’s just a shell game – a state summary notes

To offset these increased rates, NYSERDA has agreed in the Consent Decree to use a portion of the RGGI proceeds to fund energy efficiency programs in Con Edison’s rate territory, which such funds will be commensurate with the costs associated with Con Edison’s payment of allowance costs to Indeck, BNYCP and Selkirk.

NYSERDA is the New York State Energy Research and Development Authority, they dole out RGGI funds.

Finally, apparently constitutional details (even fundamental ones) insult right-thinking people. http://www.timesunion.com/local/article/Group-linked-to-billionaire-Koch-brothers-seeks-1445005.php notes:

Peter Iwanowicz, a former DEC commissioner and head of the state Office of Climate Change who is now an official with the American Lung Association, said, “It is clear that those who are behind the suit are standing up for polluters and their profits, and they care very little about the people in New York.”

Note that RGGI is about CO₂ and only CO₂, and that CO₂ is not a significant breathing problem, at least not compared to sulfur and nitrogen oxides. Sigh.

At the moment…

… only New Jersey is poised to leave RGGI. If they do, that will leave Maryland and Delaware disconnected from the rest of the RGGI states. Whatever will they do? My guess is buy electricity from Pennsylvania at a discount. Maybe New Jersey too, but only if there’s a market for offshore wind power.

Previous posts

This isn’t a complete list, but it has the important ones. If you want to see them all, just enter RGGI in the search window at the top of any WUWT page. Or click the link.

12th quarterly RGGI auction a bust? It sure wasn’t a boom.

New Jersey announces intent to pull out of RGGI cap and trade – Christie strikes major blow

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

Electric Utility sues New York over CO2 regulation

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