May 07. 2011 8:41PM

Key vote expected this week on participation in cap-and-trade program

New Hampshire Union Leader

CONCORD — A political showdown is looming this week over repealing the Regional Greenhouse Gas Initiative, a cap-and-trade program aimed at reducing carbon emissions in the Northeast.

The Senate Wednesday will act on House Bill 519, which would withdraw New Hampshire from the 10-state program, initiated by former New York Gov. George Pataki.

The repeal passed the House by a veto-proof margin of 251-108, and the Senate needs 16 votes to override Gov. John Lynch's promised veto.

At the end of the week, the Senate did not appear to have the 16 votes needed to repeal the program, although a majority of the 24 members favor its elimination.

Senate Majority Leader Jeb Bradley, R-Wolfeboro, said Friday “there are enough votes to repeal, but not to override. We're one or two votes short.”

Activists are expected to lobby senators before the vote. The New Hampshire chapter of the Sierra Club is airing radio ads in support of RGGI featuring state business owners, while the New Hampshire Americans for Prosperity group is expected to urge senators to vote for repealing RGGI, as it did with House members before that vote.

Bradley is exploring middle ground, but said he is not sure there are 16 senators who want to reform RGGI. Bradley proposed program changes in an amendment last month similar to one he expects to introduce Wednesday on the Senate floor.

Under Bradley's proposal, the cap-and-trade program would provide consumer rebates; direct money to existing energy efficiency programs run by utilities; increase oversight and transparency; and allow the state to withdraw if a large New England electric user such as Massachusetts or Connecticut left the program.

Bradley predicts that by the time lawmakers have left Concord in June, they will have agreed on significant changes to the program.

“Setting aside the issue of climate change, I don't believe the United States should disadvantage itself while India and China and other countries will not accept any emissions reductions,” Bradley said. “I don't think New Hampshire should disadvantage itself either.”

Bradley has two key objections to the program, increased electric rates for consumers, particularly if demand increases in the future, and how money from RGGI is used.

He noted Dartmouth College, the University of New Hampshire and Stonyfield Farm all received large grants under the program. “The money raised in the RGGI program goes out in politically driven grants and would be far better spent on the developmentally disabled wait list,” he said, or to make schools and town halls more energy efficient.

If the money had gone to weatherization of schools and town halls, “there'd probably be more support for the program.” Bradley said. “At a time we have the budget problems we do, it is time for people who support this program to wake up and smell the coffee.”

Bradley said he fought for many years as a state representative to lower the price of electricity for New Hampshire consumers, and he worries that when demand increases, the current law will allow prices to spike significantly.

Under Bradley's proposal, electric utility customers would receive rebates from auction proceeds over $1 per credit, instead of the current threshold of $9 per credit.

Under RGGI, power-plant owners take part in an auction to purchase carbon dioxide emissions credits. States are allocated proceeds of the auctions on a pro-rated basis.

As demand for electricity has slowed in a poor economy, auction prices have fallen to $1.86 per unit from a high three years ago of more than $3.

But Catherine Corkery, New Hampshire Sierra Club chapter director, said issuing the rebates may cost more than the rebates themselves. She said the program costs residential electric customers using 600 kilowatt hours per month an average of 36 cents a month.

“What is your rebate check going to look like?” Corkery asked.

She urged lawmakers to wait for a study of the program to be completed before making any significant changes to it.

The study, approved by last year's Legislature, will be finished in several months.