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Raritan Valley Group > Archive > Regional Greenhouse Gas Initiative (RGGI)
Regional Greenhouse Gas Initiative (RGGI)
RGGI is a cap and trade program. Under the initiative, electric power plant operators buy credits at quarterly auctions for the carbon dioxide they emit. Proceeds are then to be used to pay for renewable energy initiatives and promote conservation, although some states have used some of the money to balance the overall budget. The program had raised more than $950 million in the ten states from Sept. 2008 through March 2012."
Cap and Trade:
As of Dec. 2005 seven states were involved.
New Hampshire joined on June 12, 2008, bringing the total to 10 states.
Emission permit auctioning began in September 2008, and the first three-year compliance period began on January 1, 2009.
There have been 13 auctions from Sept. 2008 to March 2012 raising $952 million. The amount collected has been declining as demand for carbon allowances declines.
Total NJ (approximate) 2009 $349 M $67 2010 $283 M $33 2011 $174 M $13New Jersey:
New Jersey was a member, but in May of 2011 Governor Christie pulled the state out. He acknowledged the effects humans are having on climate change but said, "The whole system is not working as it was intended to work. It's a failure."
Christie vetoed a bill in August, 2011 that would have required NJ to remain in RGGI.
New Jersey collected $113 million over the period. It will be allowed to retain $102 million after it pulls out in 2012.
In March of 2012 the NJ Senate passed another bill which would require the state to remain a member of the Regional Greenhouse Gas Initiative.
How much will it cost?
The climate debate has changed significantly since then.
How this will affect electricity rates depends on how the auction revenues are spent. A 2008 study in NH says if revenues were returned to utility customers, The average PSNH residential customer could expect to pay $0.26 more per month in 2009 and $1.30 in 2018.
New Jersey Costs
In New Jersey: (Note: The following are ball park numbers, I couldn't find exact counts) Average of $38 million per year collected in NJ from RGGI auctions in 2009-2011 3.1 million Residential customers 0.8 million commercial customers Residential customers constitute 40% of electrical revenues, commercial the rest. 41¢ per month per residential customer $2.37 average per month per commercial customer Small businesses would be less than $1 per month This is slightly less than the 0.7% per month in the Analysis Group study (see below). Electric customers 2.2 million Public Service Electric and Gas Co. (PSE&G) 1 M Jersey Central Power & Light Company (JCP&L) 0.5 M Atlantic City Electric (ACE) 0.07M Rockland Electric Company (RECO) Source: BGS AuctionStudies
The Feb. 2012 report Stop The Clean Air Rollback, by the Environment New Jersey Research and Policy Center quotes the Analysis Group study (below) saying "RGGI will lead to average energy savings of $25 per residential customer across the Northeast" due to energy consumption reductions funded by RGGI.
A 2011 Nature Conservancy article, says,
A Nov. 2011 "New Analysis Quantifies Economic Impact of Regional Greenhouse Gas Initiative in Ten States" by the Analysis Group had the following key findings::
In the report "The Economic Impacts of the Regional Greenhouse Gas Initiative" they say
"The scope of RGGI's positive economic benefits varies by state and region, in large part because the states spent the RGGI allowance proceeds differently. Different expenditures have different multiplier effects in their economies and different impacts on their electric systems. For example, a state's use of RGGI dollars to reduce energy use in the electric sector lightened the earlyyears' cost impact for electricity consumers by turning the RGGI program into a down payment on lower overall bills for electricity in the longer-term. The New England states, for example, spent much of their RGGI dollars on energy efficiency programs, and so New England's electric system realizes overall benefits from RGGI, even before looking at the macroeconomic impacts. In the other regions, use of RGGI dollars to pay for general-taxpayer-funded programs ends up transferring dollars from the electric system to the other sectors of the economy. The gains in the larger economy (from re-circulating RGGI auction proceeds broadly) offset the negative impacts in the electric sector in these other RGGI states (New York, New Jersey, Delaware, and Maryland (in PJM)).
Shortly thereafter the Americans for Prosperity (AFP) a political advocacy group set up and managed by the Koch brothers, sent out a brochure asking people to call State Senator Bateman because of his support for RGGI.
The Raritan Valley Group sent Senator Bateman a Letter thanking him for his support.
Jeff Tittle, Sierra Club NJ Chapter director, said,
Dan Aronson, Associate Professor of Economics at the Raritan Valley Community College and former Raritan Valley Group ExComm member wrote a letter to the editor praising Bateman.
ACE - Atlantic City Electric ARP - Acid Rain Program BPU - Board of Public Utilities DEP New Jersey Department of Environmental Protection CAP - Carbon Abatement Program CAP & Trade - An environmental policy tool to reduce carbon emissions. see above. CARB - California Air Resources Board Carbon offsets - Allow companies to fund projects that reduce greenhouse gas (GHG) emissions anywhere in the world to offset reductions that are too expensive for you to make in your own systems. ENE - Environmental Northeast ECG - Electric Customers Group EPA - U.S. Environmental Protection Agency FERC Federal Energy Regulatory Commission JCP&L - Jersey Central Power and Light NJDEP - NJ Department of Environmental Protection PJM - Pennsylvania-New Jersey-Maryland Interconnection - A regional transmission organizations (RTO) coordinating the movement of power through the transmission network across and within its region and reporting to the Federal Energy Regulatory Commission (FERC). PSE&G - Public Service Electric and Gas RAC - Remediation Adjustment Clause for cleaning up polluted Sites RECO - Orange & Rockland Utilities RTO - Regional Transmission Organization e.g. PJM SBC - Societal Benefits Charge - A charge on your utility bill to fund programs such as, Low income programs, nuclear decommissioning, energy efficiency and renewable energy programs, RAC
Updates: 4 May, 2012 Changed: Remediation Adjustment Clause for cleaning up polluted Sights To: Remediation Adjustment Clause for cleaning up polluted Sites