Energy/Utilities

New Hampshire's Next "Green" Step: The Regional Greenhouse Gas Initiative

July 2007

By Heidi L. Kroll, Market and Policy Analyst

New Hampshire prides itself on using a mix of ingenuity, practicality, and collaboration to come up with solutions that are right for citizens and business. Its approach to environmental improvement is no exception. The state recognizes that by bringing stakeholders together and taking the time to carefully work through issues, solutions emerge that are acceptable to most if not all parties. This approach culminated in passage of a Renewable Portfolio Standards bill (HB 873) earlier this year. Now, the Granite State hopes to build on that success as it works toward legislation that, if passed, will guide the state's implementation of the Regional Greenhouse Gas Initiative (RGGI).1

RGGI — pronounced "Reggie" — is a cooperative effort among ten Northeast and Mid-Atlantic states to design a regional cap-and-trade program, for carbon dioxide emissions from area power plants, set to take effect in 2009.2 New Hampshire's Department of Environmental Services (DES) and Public Utilities Commission (PUC) participated in the regional process that resulted in the development of the RGGI model rule. While work at the regional level continues, the focus has now shifted to the state level where each state is working on how to best tailor the law and rules to meet its unique needs and circumstances.

In New Hampshire, the DES and the PUC have been meeting with stakeholders since October 2004. So far, there have been eight meetings to share information and solicit input. At the most recent meeting on May 21st, stakeholders were briefed on a study that will be performed by the University of New Hampshire (UNH) and completed this fall.

The study will analyze the potential impacts of different RGGI implementation strategies on New Hampshire's economy and electric rates. The findings will help legislators' decision making, as they weigh the short- and long-term costs and benefits of different approaches to RGGI. Differences include, for example, how many emission allowances will be given away versus auctioned, and how auction proceeds will be used. One option is a Strategic Energy Fund that could be used to help pay for more energy efficiency, renewable power, energy code compliance, and/or other climate change initiatives. This topic will, in fact, be the subject of the next New Hampshire stakeholder meeting on July 31st.

Because New Hampshire will not take up its RGGI legislation until the 2008 legislative session, we can also take some lessons from other Northeast and Mid-Atlantic states that have already enacted RGGI bills. Maine's RGGI legislation was signed into law by Governor John Baldacci on June 18th, after many months of drafts, re-drafts and negotiations. The groundwork was laid for the legislation last fall when the Maine Department of Environmental Protection (DEP) held a series of roundtables around the state to engage a broad range of businesses, interest groups and citizens. Much as the NH DES is now doing with stakeholders, the Maine roundtables, attended by over 120 people, were intended to gather input from participants so that the RGGI bill could be drafted with their concerns in mind.

The Maine DEP and the Muskie School at the University of Maine also developed and distributed educational materials, a RGGI primer and FAQs on RGGI, before the legislation was introduced. And this spring, when the Maine RGGI bill was being considered by the Legislature, four members of the British Parliament and the UK General Counsel in Boston visited Augusta to share their government's experiences in reducing carbon emissions. Maine legislators learned that, while the UK committed to reducing emissions 12.5% from 1990 levels by 2012, it has already reduced emissions by 14%, through energy efficiency, fuel switching, more renewable energy and other technological solutions. They also heard that the UK has made these reductions while at the same time maintaining economic growth: the UK economy grew 49% during the same time that emissions were reduced by 14%.

It goes without saying that RGGI holds both challenges and opportunities for participating states. The challenges arise in developing a multi-state CO2 cap-and-trade program that balances the need for uniformity and flexibility, and that does not interfere with an affordable, reliable energy supply or with the diversity among state's other policies and programs. The opportunities include the potential to develop renewable energy and other green technologies to reduce our carbon emissions and make our economy grow. While this is clearly a tall order, RGGI participants appear committed to making the initiative work, motivated by the opportunity for benefits to their economies, their environments, and their citizens.


Footnotes:

1. Additional information on RGGI is available at the NH DES web site and the www.rggi.org.

2. At some point in the future, RGGI may be expanded to include other source and/or other types of greenhouse gas emissions.


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You may contact
Heidi Kroll at
800-528-1181.