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NH to remain part of RGGI carbon tax initiative

New Hampshire Union Leader

February 10. 2015 11:38PM
Electricity prices spiked in 2014 but that's good news say RGGI supporters. "These conditions make energy conservation measures even more cost effective," the NH Department of Environmental Services says in its 2014 annual report on the carbon tax initiative. (David Lane/Union Leader)

CONCORD — New Hampshire will remain part of a nine-state collaborative created to reduce carbon emissions in the Northeast and help slow global warming.

The third effort in the past four years to pull the Granite State out of the Regional Greenhouse Gas Initiative failed to win support in the House Committee on Science, Technology and Energy.

The Republican majority on the committee voted along party lines on Feb. 5 to amend legislation filed by State Rep. Richard Barry, R-Merrimack, who led the fight to pull New Hampshire out of RGGI in 2011 and in 2012.

Barry’s bill was amended to keep New Hampshire in RGGI, but to channel all of the money raised in the program to rate relief, with none left over to promote renewable energy.

If passed by the House and Senate, the idea of eliminating all RGGI funds for weatherization faces a likely veto from Gov. Maggie Hassan.

“Gov. Hassan believes that encouraging innovation in the state’s clean-energy economy, promoting energy efficiency projects and increasing access to weatherization are critical to ensuring that we continue to maximize the benefits of the program for the people and businesses of New Hampshire,” said spokesman William Hinkle. “She opposes efforts that would eliminate this essential part of the initiative.”

The program, launched in 2008 with bipartisan support, creates financial incentives for power plant owners to reduce carbon emissions or pay what opponents call a “carbon tax,” the proceeds of which are used to fund alternative energy sources and conservation efforts in the nine-state region.

The states currently participating are Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont.

Power generators have to reduce carbon emissions or purchase carbon allowances sold at auction. Those allowances in New Hampshire have been costing generators about $5 per ton of carbon dioxide.

Legislation passed in 2012 assures that $4 goes to rate relief, and $1 of each certificate sold goes to subsidize renewable energy projects. If Barry’s amended bill becomes law, all $5 would go toward reducing electric rates for everyone.

For 2015, the program is expected to generate about $17.5 million, of which $15 million will be used to lower rates, according to Meredith Hatfield, director of the Governor’s Office of Energy and Planning.

Cities and towns in the state would get about $2 million for energy improvements to municipal buildings, leaving $500,000 for weatherization programs aimed at low-income households.

Blending that $2.5 million into the rate base would provide negligible rate relief, according to Hatfield, while eliminating funding for a much-needed program.

“That additional $2.5 million will add up to about 15 cents a month in savings on the average electric bill,” she said. “There’s such a tremendous need for weatherization in the state. We have 35,000 households that qualify.”

The state chapter of Americans for Prosperity, a conservative policy group, has lobbied for full repeal of RGGI, but failing that has proposed directing all the proceeds to rate relief.

“The committee was very sensitive to the fact that we are seeing massive increases on the electric supply portion of our bills,” said AFP State Director Greg Moore. “It’s certainly disappointing that the governor is opposed to offering ratepayers relief at a time when it is so desperately needed.”

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