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State Senate to vote on emissions bill
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By DENIS PAISTE
New Hampshire Union Leader Staff
Wednesday, May. 7, 2008
MANCHESTER – Skyrocketing electric bills and lost jobs are potential outcomes of the Regional Greenhouse Gas Initiative (RGGI) bill up for a state Senate vote tomorrow, business leaders say.
RGGI will force electricity producers to buy allowances in a regional auction to cover their carbon dioxide (CO2) emissions. The money raised will be directed to energy efficiency projects, with a goal of lowering energy consumption, carbon dioxide emissions and potentially global warming.
But the costs of those allowances are unpredictable, and they'll be passed on to residential, nonprofit and commercial consumers, industry sources say.
The RGGI legislation, which has the backing of Gov. John Lynch, could cost New Hampshire electric ratepayers an additional $17.2 million to $103.4 million in its first year, according to a University of New Hampshire study of potential RGGI costs and benefits in 2009.
"We're concerned this could be very damaging to our ability to compete globally," said Jim Roche, president and CEO of the Business and Industry Association of New Hampshire. "We already have some of the highest electric rates in the country and in the world; we already have some of the highest health-care costs in the country and in the world. We have high wage rates in New Hampshire, so we have businesses that have a very high cost structure in New Hampshire, and what RGGI will do is increase those costs.
The PSNH Merrimack Generating Station in Bow sends a column of smoke and steam into the cold morning air as the coal burning power plant works to keep-up with the need for electricity that's been high this winter, including 2 days setting peak demand records, due to the prolonged cold. (BOB LAPREE)
"The question is not, will it increase costs, but by how much," Roche said.
Rising anxiety
New Hampshire is one of 10 mid-Atlantic and Northeast states from Maryland to Maine (excluding Pennsylvania) that have committed to participate in the first cap-and-trade program to control carbon dioxide emissions in the United States.
Under the plan, electric power generators would have to buy one allowance for each one short ton of carbon dioxide they emit. Early estimates range from $2 to $12 for each allowance, with a $1.86 minimum bid for the first auction scheduled in September.
To ease the potential pain in New Hampshire, the original RGGI bill proposed a $12 per allowance threshold, above which auction proceeds would be rebated to the state's ratepayers. The Senate Energy, Environment, and Economic Development Committee cut the threshold to $6 per allowance.
For BAE Systems, New Hampshire's largest manufacturing business with about 4,600 employees, a RGGI cost of $12 per allowance, would cost the company close to $1 million more a year for electricity.
"In order for us to successfully meet the needs of our customers, we need to have dependable sources of energy and as affordable sources of energy as possible," said Jeffrey Rose, director of government relations for BAE Systems. "These policies and initiatives do have a direct impact on the state's competitiveness within the job market and trying to maintain and grow the (state) economy," he said.
BAE Systems' Electronics and Integrated Solutions unit is based in Nashua. Donald Hill, manager of facilities operations, said the company has invested an average of $200,000 a year in energy efficiency for a decade, saving about $550,000 a year. Without that program, "we'd be back to square one," Hill said.
Nonprofits such as Elliot Hospital in Manchester also would face substantially higher electric costs under RGGI.
Elliot Health Systems, which includes the hospital as its largest electric user, paid $2,442,334 for electricity in fiscal year 2007 and anticipates paying $2.66 million this year.
Anne Hill, Elliot's director of facilities and clinical engineering, estimated the RGGI auction could add $50,000 to $100,000 to the hospital's yearly electric costs.
"We have many buildings all over the Greater Manchester area and each one has an individual electric meter," Hill said.
"The financial impact really does look substantial ... and it needs to be looked at closely before the legislation is passed."
No out clause
The first RGGI auction is planned for Sept. 10, with a second auction set for Dec. 17.
Participating states anticipate auctioning nearly the entire annual regional emissions budget, which initially is about 188 million short tons of CO2. New Hampshire's share is 8.6 million allowances, equivalent to 8.6 million tons of carbon dioxide emissions.
The legislation, HR 1434, passed the House on March 19. It moves to the Senate floor vote with a recommendation of "ought to pass as amended" from the Senate Energy, Environment, and Economic Development Committee.
Neither Senate Energy Committee Chairman Martha Fuller Clark, D-Portsmouth, nor Vice Chairman Margaret W. Hassan, D-Exeter, returned a call yesterday to discuss the matter.
Sen. Ted Gatsas opposes the measure outright.
"It's a tax on dirty air at a time when consumers and businesses in New Hampshire can't afford additional taxes," Gatsas, R-Manchester said.
"Let's sit on the sidelines; let's see what happens in September; let's see what the federal government is doing because they are proposing one on a national level," he said.
"What happens to this one if there is one on a national level?" Gatsas asked. "There is no out clause," he said, noting that New Hampshire passed its own Clean Air Act in 2002.
Michael Licata, director of government affairs for the BIA, noted that anyone can purchase the allowances.
"If a well-intentioned consortium of environmental groups got together to purchase these allowances to address climate change in the Northeast, they could do that," he said.
That might not leave enough allowances available for generators who are required to purchase them by law.
Martin Murray, spokesman for Public Service of New Hampshire, the state's largest electric utility, echoed that concern. He said PSNH "can lower our carbon emissions. But we can only do that if we have the allowances necessary to generate power."
PSNH is concerned about both the availability of allowances when it needs them and being able to provide electricity at price that is affordable to customers, he said.
"There is not that guarantee because it's an open auction, and can be bid on not only by power producers but by speculators and organizations which want to retire them," he said.
Osram Sylvania, which has production facilities in Exeter, Hillsborough and Manchester, like many of those interviewed for this article, said it supports the intent of the Regional Greenhouse Gas Initiative.
"But, the current bill has deficiencies that threaten to handicap Osram Sylvania and other companies that employ thousands of New Hampshire residents," spokesman Stephanie J. Anderson said.
"We already pay some of the highest electricity rates in the country and the current RGGI bill threatens to push those rates even higher. We believe lower thresholds for ratepayer protection rebates and provisions to guarantee RGGI revenues are actually used for energy efficiency investments would make this well-intended legislation better."
If the bill gets an affirmative vote on the Senate floor, it moves to the Senate Finance Committee for further review. After that, if it survives a final floor vote in the Senate, it would move to a House-Senate Committee of Conference.
Gov. Lynch, who signed on to the agreement with the nine other governors in 2005, testified in January in support of HB 1434 before the House Science, Technology and Energy Committee.
To study the issue, the Greater Manchester Chamber of Commerce will hold a breakfast forum, "The Cost of Opting in to 'ReGGIe,'" on Wednesday, May 21, at The Derryfield restaurant in Manchester. For information, call 792-4122.
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YOUR COMMENTS
If correct, the UNH report indicates that it will take at least six years for the savings to offset the the costs of RGGI. If businesses don't have the reserves it can mean a lot less exports from NH, and disappearance of current industries.
A lot of jobs can be gone in six years.
- Gavin G., Concord NH
Unfortunately the carbon lobby doesn't care about the high energy prices we are suffering from or how NH families are expected to pay for this. China is making everything for us now and they are dumping things like benzine into their rivers. The air is so polluted that they need to shut down most of the factories around the Olympics just so outsiders will be able to breathe. Lets put some perspective on this whole thing. Lets fix the HUGE pollution problem with India & China so it does not KILL people and then work on the smaller stuff like carbon dioxide after that. A bill like this is going to put a larger burden on NH manufactures that are already having a hard time competing on a national scale due to high energy and labor prices. Remember not everyone can work at Wal-mart or a bank. Someone needs to make the money to spend there.
- Kevin Boette, Lyndeborough
Just one more step the far left eco-nazis have taken that has plunged this nation to the brink of bancrupcy. First it was kill any nukes, causing a huge increase in oil consumption. Add to that no oil drilling in ANWAR, off the coasts of California, Florida and New Jersey. No drilling allowed by the USA in the eastern gulf of Mexico where China and Castro are now drilling.
Despite the fact that earth's temperature has not risen since 1998 and despite the FACT that sea ice is at its greatest in 20 years, all this craziness continues.
The cost of gasoline and home heating oil has escalated beyond affordability because of policies of the liberal democrats. When will we wake up and kick them out?
- Ed August, Sr, Walpole
Gee, thanks for stating the obvious. Now that you've proclaimed that prices will get sky high- they take that as an ok to do it.
Who cares about the little guy anyway?
As for the emissions nonsense- NH is fine and that horse was beat to death years ago.
It's all coming from states out west.
I am tired of people like Shaheen (who gave us all this emissins nonsense) beating the environmental drum.
The rich people never have to worry about their car ever passing an emissions test- we buy them new ones every year!
- Pauline, Franklin
So, there's a limited supply of allowances, and they're subject to open bidding so that any Tom, Dick or Harry with cash to spare can buy them? I wonder how long it will take for allowances to be listed up on ebay next to overpriced Wii consoles.
- Adam Wells, Manchester, NH
Unfortunately business groups gave their initial support to this measure and went along for too long for fear of offending the Governor. They were complicit and now are reaping what they have sown.
- RF, Concord
An important piece of information not mentioned in the article is that electricity prices in NH will rise regardless of whether NH joins or not. NH is on a regional power grid and will shares the costs of higher prices in the other nine RGGI states.
- Phil, Durham
Between this and the payday article I'm starting to wonder if the UL has just decided to ditch it's already shaky reporting staff and instead just have the industry groups write its feature stories. What's next - "The Untold Benefits Behind High Oil Prices and $10 Billion Quarterly Revenues"?
And Jonathon from Derry, isn't the "why do (insert name of group here) hate America" argument a little dated at this point?
- Jason, Londonderry
So let's see, The state wants to cut back on Greehouse gasses by passing an Orwelian Cap and trade program, yet opens up the largest ATV park in the country and continues to promote tourism thru "drive to NH" get aways?
- josh tiffany, warner nh
I work on public policy issues for the radically centrist conservation organization, the Society for the Protection of NH Forests. Denis Paiste's story today on RGGI totally misses the mark in two ways. First, it only tells one side of one piece of a very complex set of issues regarding RGGI. Second, it suggests that Senators should decide how to vote on this bill (HB 1434) based on what the NH Business & Industry Association thinks will happen to electric rates if the bill passes.
Back in 1991 then President George H.W. Bush (with help from his Chief of Staff John H. Sununu) pioneered the concept of cap and trade by amending the Clean Air Act to reduce acid rain causing emissions of sulfur dioxide. Substantial reductions of SO4 have been achieved over the past 17 years. Actual compliance costs were more than 50% less than what was estimated by EPA at the time. Using market forces to drive good decision-making on pollution control has strong bi-partisan support going back 20 years.
The BIA's crystal ball on future prices of electricity appears to use fear where data is ordinarily the rule of thumb. UNH has proveded Senators with a wealth of economic analysis demonstrating that the economic costs and benefits of participating in RGGI significantly outweigh the costs and benefits of not participating. Further, the UNH work shows, the reinvestment of dollars charged for allowances to emit CO2 will have a greater economic return for all NH energy consumers than will any other potential use for these funds.
Who would ever have guessed that the BIA would have heartburn over letting the marketplace determine the most efficient way of investing in the cleaning of our air and in conservation of energy?
- Will Abbott, Holderness, NH
Why stop with RGGI? Why not raise the price of electricity so high that we have brownouts? That is the state of affairs in Cuba.
But even Raul just allowed them to purchase computers. That requires juice. Is a nuclear plant around the corner? Or maybe they'll get their electricity from, (gasp!), coal!
Raul is coming towards us and Lynch is running towards them. Completely upside down and backwards. Thank goodness we have Senator Gatsas willing to stand up and confront the insanity. Kill the bill, and kill it now.
- Steve, Manch
Wow... talk about a casebook case of biased journalism.
Not one single comment from anyone in the environmental community supporting the plan. Not a single paragraph of background from supporters.
Not one.
Just the usual business suspects and political hacks.
Disappointing indeed.
- Gary, Pensacola, Florida
Just look at California for the endgame of what this will lead to. CA's Rancho Seco nuclear facility, built in 1975, used to produce 900 megawatts of power. Then they decided to "Go Green", shut down the reactors, and converted the facility to solar. Now it produces only a pitiful 4 megawatts.
The result was, and is, massive power shortages.
Don't be fooled by the "greenies" with their cultish claims, NH. The same people responsible for CA's power crisis want to bring their destructive game here, and force your power bill through the roof so you'll "conserve".
- John Singleton, Derry
If the Clamshell Alliance have not close the second nuclear reactor back in the 70's, we would have been much better off pollution wise today. Let's send the bill to the former members of the Clamshell Alliance.
- rick, hooksett
It is very disappointing to see that the reporter did not speak with one person who had a different point of view on the program, or acknowledge the economic report done by UNH that the RGGI program will create jobs and actually lower energy bills.
This is a wonderful front page editorial disguised as journalism. Even those opposed to RGGI should be appalled by the one sided lack of debate
.
- Jim, Concord
This comes at particularly precarious time for most NH residents. We are all struggling with $3.50 a gallon gasoline, $4.00 a gallon home heating oil and $4.25 diesel fuel. We are also struggling with the skyrocketing costs of food. Inflation is rearing it's ugly head, many say the county is in recession. This is not the time to add additional financial burdens to the residents of NH! Manmade Global Warming is not scientific fact. We should not needlessly pollute but if we damage our economy needlessly we are as a society in a worse position to help it. The rush to Ethanol is proving foolish, what a great idea to burn our food and plant corn with government subsidies at the expense of wheat, soy and other staples. Let's get serious about an enrgy policy, build new refineries, nuclear power plants, drill ANWARand Continental Shelf. A green environment is only feasible to a point and when we become obsessed to the point of people losing jobs, homes, no heat, choosing between medicine and food we have goine too far. This should be voted down!
- Pete, Dover
Just another nail in the coffin for the State Dems in November.
Its amazing how a rep like Clark whose background is in Art History and has been a rep since the early 90's can be the Chair of the Energy Committee.
Hassan is just another transplant lawyer from Boston who really has no specialty.
If this plan does go through we can thank them both for the potential job losses that will come with it.
- DFM, Salem, NH
This bill is nothing more than a new tax on electricity users, which is just about everyone. It might be called cap and trade, but in actuality it is nothing more than a tax. The global warming scam has been about raising taxes and taking away liberties all along.
- Tim, Keene
I just wonder who will make money on this vote and beyond? Yes, CO2 is a problem but will this vote solve anything I say No? Green House will always be with us and we will blame anyone and anything. But we need to find a answer before it to late.
- mo baxter, plymouth
these types of efforts are coming from extreme leftwing enviromentalists who hate what this country stands for-freedom & democracy. they are enemies to the constitution because it's an agenda based on falsehood & fraud, not fact- this is what you're witnessing.
- jonathan, derry
Bills like this are OUTRAGEOUS!!! CO2 as a cause of the global warming is absurd. CO is an result of warming, NOT THE THE CAUSE. More and more scientists are disputing the HUGE FRAUD!
CO2 and global warming is the biggest fraud ever attempted to be perpetrated. 5 years from now there are going to be so many "seemingly" intelligent people with huge piles of egg on thier face from buying into this HOAX!
- Bob, Concord
What global warming! there hasn't been any global warming in New Hampshire for 10 years.
See all the numbers at the New Hampshire Climate Audit Site: http://www.nhclimateaudit.org/
- David, Keene
Glad to see you've set aside the guise of objectivity for the graphic and lede for this story. Proclaiming "Costs will go sky high[!]" and tacking on an afterthought "business leaders say" in small print is just funny. Whatever I might've gained from reading the article is lost in the distraction of the landslide-like slant of this piece.
Please, leave the rabble-rousing to the unsigned editorials.
- Steve, Manchester
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