CONCORD, N.H. (AP) – New Hampshire’s political leaders are getting behind a 10-state regional effort to cut greenhouse gas emissions to preserve the state’s climate and way of life.
Gov. John Lynch told a House committee Thursday that New Hampshire will benefit environmentally and economically if it approves the Regional Greenhouse Gas Initiative known as RGGI.
“We’ve all enjoyed the warm weather of the past couple of days,” said Lynch. “But if global warming is left unchecked, our grandchildren could be living in a much warmer climate that simply is not New Hampshire.”
He urged passage of legislation to participate with all the other New England states, New York, New Jersey, Delaware and Maryland in a market-based, “cap and trade” program to reduce carbon dioxide emissions from the region’s power plants.
The governors of the 10 states have signed a memorandum of understanding agreeing to the initiative. It is a regional plan, but each state must adopt its own laws and regulations. States in other regions of the country are considering similar plans.
Under RGGI, a regional carbon dioxide emissions cap would be put in place for large fossil fuel-fired power plants beginning in 2009. Allowances would be issued equal to the total cap and apportioned to the participating states. Utilities would have to buy enough allowances within three years to cover their emissions. Since the number of allowances is limited by the regional cap, overall emissions are expected to be reduced.
New Hampshire’s cap would be 8.6 million tons per year out of 188 million tons emitted by the 10 states. Affected power plants in New Hampshire would be: Schiller Station in Portsmouth, Newington Station in Newington, Merrimack Station in Bow, Granite Ridge in Londonderry and Newington Energy LLC in Newington.
Other types of allowances also are part of the plan. For example, capturing methane gas at a landfill also reduces carbon emissions. Also under consideration is using forestry management to reduce carbon emissions through techniques as simple as planting trees.
The money utilities pay for the allowances would go into a state-regulated fund to improve energy efficiency.
State environmental officials envision a wide range of uses for the money that include cooling and heating efficiencies. For example, money could be used to help insulate homes or to buy wood stoves or more efficient furnaces.
“Anything we can do to get unleashed from that oil barrel in the Middle East will benefit us all,” said Executive Councilor Ray Burton.
Environmental Services Commissioner Thomas Burack noted that New Hampshire’s electric users will pay higher rates regardless of New Hampshire participating in RGGI. That’s because New Hampshire buys about half its power from a wholesale market whose rates will rise as other states’ utilities buy RGGI allowances and pass on the costs to ratepayers.
Burack said, if the state does not join the initiative, electric users would lose the benefit of a share of the allowances going into an energy efficiency fund whose aim is to lower both carbon emissions and energy consumption over time.
Some witnesses expressed concern about how the allowances would be auctioned, who would be permitted to buy them and what impact that might have on rates.
Terry Large, speaking for Public Service of New Hampshire, said the utility wholeheartedly supports RGGI’s concept.
But Large said the utility believes the allowances should only be available to the utilities that need them to comply with the law. Second, he asked for safeguards to prevent the price of RGGI allowances from spiking electric rates. Third, he said utilities should not be penalized for exceeding emission caps to meet emergency power demands.
Similarly, Jim Roche, president of the Business and Industry Association of New Hampshire, questioned if an open auction would result in speculators buying the allowances to take them off the market to create a shortage and spike prices.
“Consumers – residential, commercial and industrial – will shoulder such price increases,” he said in written testimony.
Roche also questioned what happens to utilities that don’t have the necessary allowances within the three-year deadline set in the bill. Utilities would have four years under some circumstances.
Roche also said the energy efficiency fund would not be protected constitutionally for that purpose and could be a tempting target to fill state budget shortfalls.
AP-ES-01-10-08 1716EST
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