This is an explanation of The Regional Greehnouse Gas Initiative, to which Governor Lynch has committed us, from Michael Harrington, former Commissioner of PUC. He explains that it is nothing more than a tax on your energy bills and thus another shadow or broadbased tax.
What is RGGI? RGGI is a northeast region initiative to limit the emission of CO2 from electric generating plants over 25 MW’s. All other sources (e.g. automobiles) of greenhouse gases are NOT covered
What states are involved? Originally there were 9 states but Mass and RI did not sign the Memorandum of Understanding (MOU) due to the projected resulting increase in electric rates. NH, Me, Vt, Ct, NY, NJ and De signed the MOU
What does the MOU commit NH to? By signing the MOU, NH is only committed to present proposed RGGI implementation legislation to the legislature. This commitment has been fulfilled via the introduction of HB 1531
What are the goals of RGGI? The initiative calls for stabilizing the CO2 emissions from the region’s electric generating plants over 25 MW’s at current levels from 2009 to 2015; followed by a 10% reduction by 2018.
Will RGGI have any effect on global warming? No one has even suggested that RGGI, when fully implemented, will have any effect on global warming. A 10% reduction in CO2 emissions from electric generating plants in these 7 states is minuscule when compared to the total amount of greenhouse gases released worldwide.
So what will RGGI really accomplish? RGGI is quite simply a tax on CO2 released from electric generating plants. Everyone who purchases electricity will pay for it and the money will be used to fund new or expand existing energy programs in each state. It will also allow the member states to claim the high ground on the global warming issue (remember though, RGGI will have no actual effect on global warming)
The bottom line is RGGI is just a way of raising money to spend on state sponsored energy programs which may or may not (e.g. Synthetic Fuels Corp.) reduce future energy demand. It is politically easier to raise the money under the banner of reducing greenhouse gas emissions than to just put another tax on electric use. The net result however, is the same; users pay more for electricity to fund new or expanded state programs
How much will RGGI cost? There is no easy answer to this. The RGGI proponents say the new and expanded energy programs will save at least enough money to pay for RGGI. This is an extremely optimistic belief. All 7 states presently have energy efficiency programs which have been going after the low hanging fruit for some time. Large increases in funding for these programs will not result in a linear reduction in energy use. The next MW that is saved will cost more than the last one. Additionally, due to recent large increases in electric costs, many customers are initiating energy efficiency projects on their own.
There are also some fundamental flaws in the modeling being used. For example, the models show coal plants being built in the region when natural gas prices go over $5.00/MBTU. Gas prices are presently well above this and will be for the foreseeable future but building a large coal generating plant in the 7 state region would be politically very difficult.
There is also a very optimistic view of the amount of renewable electric generation that will be built. For example, even though Ma has a renewable portfolio requirement with economic penalties for non attainment, they continue to fail to meet their annual goal. Additionally, the RGGI wind generation projections for Me and NH are much higher than what has actually been proposed.
The RGGI modeler’s estimate for the annual price increases for the average residential customer in NH, without taking into account any cost savings from the new energy efficiency programs, is $15 to $20 per year (based on 2009 gas futures of $10/mbtu.)
What is RGGI’s little secret? RGGI’s little secret is nuclear power. All the RGGI model runs have as a basic assumption that all the nuclear plants in the region will be granted all planned generation upgrades and will receive 20 year life extensions. This is ironic because many of the people pushing RGGI are also against life extensions for the nuclear plants. One representative at the RGGI meetings stated they would close down all their nuclear plants and still make their RGGI goals even though this was a complete contradiction of the RGGI modeling assumptions
What else will RGGI do? It will create a new regional bureaucracy funded by the sale of CO2 credits (i.e. by the electric users in the region). This new bureaucracy will have staff and offices in NY City.
Where is RGGI going in NH? HB 1531 would establish a study committee to study the implementation of RGGI. The committee made up of members from the House, Senate, PUC, DES and Office of Energy Planning will issue a report by 11/01/06. Part of what this committee will be looking at is how RGGI compares and affects the existing NH Clean Power Act. This act places a CO2 emissions cap on PSNH’s coal fired plants only.
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Chalk this up as another one for more government, more taxes.