Maine revenue from last RGGI cap-and-trade auction over $1.2 Million

BY RAMONA DU HOUX

December 11, 2012

The Regional Greenhouse Gas Initiative (RGGI) brought in $1, 224, 330.24 for various weatherization and energy efficiency programs in Maine from the 18th cap-and-trade auction. RGGI is the nation’s first market-based cap-and-trade regulatory program to reduce greenhouse gas emissions. In total the program has made the state $34,246,621. 95 since the auctions started.

Currently nine Northeastern and Mid-Atlantic states participate in RGGI the nation’s first market based cap-and-trade regulatory program to reduce greenhouse gas emissions.

Maine was instrumental in leading the effort to form RGGI during the Baldacci administration when David Littell was Commissioner of the Maine Department of Environmental Protection. Companies, stakeholders and environmental organizations testified on behalf of the proposed RGGI bill before it was voted on by the state’s legislature.

“RGGI is important because it puts business, industry, along with the environment all on the same side. It was passed almost unanimously and with tremendous bipartisan support,” said former Governor John E. Baldacci. “It’s a model for other states and Federally.”

Aspects of RGGI maybe used Federally. The Obama administration has stated that RGGI is a successful model for a regional approach to cap-and-trade.

RGGI’s regional approach also includes continued work with Eastern Canadian Provinces that have become partners in the area’s approach to renewable energy, energy transmission and carbon capture methods. The Northeastern Regional Governor’s and Eastern Canadian Premier’s Conference, hosted and convened by Governor Baldacci, held in Bar Harbor, Maine, in 2008, specifically addressed a comprehensive regional approach to energy concerns and how states and provinces could best create jobs, energy security, and savings for residents by working together . RGGI was on the agenda.

Now, with more data, RGGI can show how the program has benefited the region economically.

“RGGI’s market-based mechanism does more than set a clear and enforceable cap on carbon dioxide pollution – RGGI also delivers environmental, economic, and consumer benefits to the RGGI states with wise allowance investments that save ratepayers money and reduce emissions,” said Littell, who is now a Commissioner of the Maine Public Utilities Commission and Vice-Chair of RGGI, Inc. Board of Directors. “The 2011 proceeds report found that RGGI investments directly benefited 2.9 million households and 7,400 businesses.”

In Maine the some of the funds generated from RGGI go to programs at Efficiency Maine to benefit businesses transform their workplaces to become energy efficient. Paper companies like Verso, in Bucksport, have transitioned their business in part because of the boost RGGI and Maine Technology bond grants gave them.

In 2005 seven states Maine, Delaware, New Jersey, New York, Connecticut, Vermont, and New Hampshire signed a “Memorandum of Understanding” committing themselves to move forward with RGGI. Special provisions were made in the MOU for Massachusetts and Rhode Island to join the effort at any time prior to January 1, 2008, which they did. Subsequently New Jersey’s Gov. Chris Christie removed the state from RGGI in 2011. While the remaining nine RGGI member states continue to take in revenues from RGGI auctions of carbon dioxide (CO2) allowances New Jersey has missed out on these revenues.

In this most recent auction 19,774,000 CO2 allowances were sold on December 5th, 2012 bringing in $38.1 million for reinvestment by the RGGI states in a variety of consumer benefit initiatives, including investments in energy efficiency, clean and renewable energy, direct bill assistance, and greenhouse gas abatement and climate change adaptation.

Bids for the CO2 allowances ranged from $1.93 to $5.14 per allowance, with a clearing price of $1.93. Allowances sold represent 53 percent of the 37,563,083 allowances offered for sale by the nine states.

According to the independent market monitor’s report, electricity generators and their corporate affiliates have won 88 percent of CO2 allowances sold in RGGI auctions since 2008.

“The 2011 RGGI proceeds report illustrates how RGGI is helping to accelerate our region’s transition to a clean energy economy,” said Collin O’Mara, Secretary of the Delaware Department of Natural Resources and Environmental Control and Chair of the RGGI, Inc. Board of Directors. “The report estimates that over their lifetime these RGGI investments will help avoid the emission of 12 million short tons of carbon dioxide pollution—or the equivalent of the emissions from two million passenger vehicles for a year.”

The Regional Investment of RGGI CO2 Allowance Proceeds, 2011 report found from 2009 to 2011, RGGI investments:

• Channeled over $617 million into the region’s clean energy economy.
• Returned $69 million in bill credits to an estimated 84,000 low-income families.
• Generated an estimated $1.3 billion in lifetime energy bill savings for utility customers. Offset more than 27 million megawatt hours of electricity generation and 26.7 million BTUs of energy generation over the lifetime of investments.

The next RGGI auction is scheduled for March 13, 2013.