Major Energy Reforms Sweep Northeastern U.S. and Canada, from Connecticut to Nova Scotia, July '07 Press
For Immediate Release
July 19, 2007
Contact: Meg Wilcox, 617-372-9400 X 204, cell 617-319-6457
Major Energy Reforms Sweep Northeastern U.S. and Canada, from
Connecticut to Nova Scotia
New Measures Tackle Climate Change by Boosting Energy Efficiency and Renewable Energy Investments, and by Implementing a Regional "Cap and Trade" System for Greenhouse Gases
ROCKPORT, MAINE- Northeastern states are passing laws that make historic changes in energy policy while starting to address in meaningful ways the challenge of global warming. These reforms - enacted in Connecticut, Maine and Rhode Island - fundamentally change the way energy will be purchased by boosting investments in energy efficiency, removing decades-old barriers to clean energy,and altering the way utilities earn their revenue.
The Northeast states are also formalizing their participation in the Regional Greenhouse Gas Initiative (RGGI, pronounced "Reggie"), which will lower carbon emissions from power plants 10 percent by 2019, and put the region on the path towards deeper cuts over the longer term. By passing laws that expand investment in clean energy sources within the RGGI framework, these states are creating a model program for the rest of the country.
"Collectively the Northeastern states, and the Eastern Canadian provinces, are implementing the next generation of energy policies that will be good for consumers and good for the environment, while taking leadership on climate change instead of waiting for their federal governments on this urgent concern," said Environment Northeast Executive Director Daniel Sosland.
Progress is occurring on the both sides of the US -Canada border. At their annual meeting on June 26,the Conference of New England Governors and Eastern Canadian Premiers (NEG-ECP) adopted a resolution committing them to a slate of greenhouse gas reduction initiatives, such as expanding energy efficiency through improved building codes, appliance standards, and other means; a clean car program; and bi-national harmonization of renewable portfolio standards. Resolution 31-1 also commits the NEG-ECP to "explore options for a market-based greenhouse gas emission trading mechanism in the northeast" and establishes 2050 as the target date for achieving the 75 to 85 percent reduction in regional carbon emissions, agreed to by the governors and premiers in 2001.
New Approach to Expanding Energy Efficiency
One of the hallmarks of the northeast states' legislation and the NEG-ECP resolution is a commitment to "all cost-effective efficiency," a new approach that requires utilities to pursue all cost-effective energy efficiency investments before purchasing traditional supply. With current regional energy efficiency investments costing about 3 cents per kWh and regular electric supply around 9 cents per kWh, the opportunities for expanding efficiency investments are substantial. This ground-breaking approach could double or triple the size of energy efficiency programs and will cut consumers' bills, reduce greenhouse gas emissions, create new local jobs, and reduce our dependence on imported fuels.
Rhode Island was the first state in the Northeast to adopt a new energy planning approach that is based on buying all cost-effective efficiency. Connecticut and Maine enacted laws adopting the model this June. With the resolution signed at the NEG-ECP meeting, all of the New England governors, and the premiers from New Brunswick, Newfoundland & Labrador, Nova Scotia, Prince Edward Island and Quebec have now agreed to develop policies using this approach.
Carbon Cap and Trade System
Maine, Rhode Island and Connecticut each passed legislation in June committing them to RGGI and providing guidance on the allocation of allowances (all the Governor's in the pact committed to RGGI administratively). RGGI regulates carbon dioxide (CO2) pollution from large power plants in ten northeast states. Under RGGI, fossil fuel burning power plants larger than 25 megawatts must obtain an "allowance" or permit for each ton of CO2 emitted. Each state is given a maximum limit or cap of carbon emissions that its power plants are collectively allowed to produce. Power plants may trade pollution allowances across the RGGI region to abide by the cap.
All three states will require 100 percent of their CO2 allowances to be auctioned, rather than given away for free to power generators. The proceeds from the auction of the permits will be invested in energy efficiency and renewable energy programs in each state. In requiring power plants to purchase their allowances rather than receive them for free, these states address a weakness in other cap and trade schemes whereby allowances are given away. In the European Union cap and trade system, for example, giving away the allowances resulted in windfall profits for some companies.
The ten states that have officially joined RGGI include Maine, Vermont, New Hampshire, Connecticut, Rhode Island, Massachusetts, New York, New Jersey, Maryland and Delaware. Emissions from all 10 states add up to the seventh largest source of global warming pollution in the world.
Renewable Energy Portfolio Standards
Maine, New Hampshire and Connecticut recently passed legislation strengthening their Renewable Portfolio Standards(RPS). Maine's legislation establishes portfolio requirements for new renewable resources to enable the state to make its commitment to increase renewable energy to 10 percent of capacity by 2017. Distribution utilities will also be required to provide customers with information regarding the availability of green power products and renewable energy credit products in their billinserts.
New Hampshire's law creates four classes of renewable energy and requires RPS compliance for each class. Renewable energy must reach 4 percent of power production by 2008, and is slated to reach about 24 percent by 2025.
The Connecticut legislation continues the ramp-up of the CT Renewable Portfolio Standard (RPS) to achieve 20 percent of energy generated by renewable sources by 2020.
Environment Northeast is a non-profit research and policy organization addressing large scale environmental challenges such as climate change in the Northeast and eastern Canada with offices in Maine, Massachusetts, Rhode Island and Connecticut.
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