Regional Greenhouse Gas Initiative:
First auction results & the future
New England Restructuring Roundtable
DEP Commissioner Laurie Burt
December 5, 2008
1
Patchwork Approach?
No, Beautiful Quilt.
2
RGGI Basics
• First mandatory cap-and-trade program for
CO2
• 10 States: MA, RI, NJ, NH, VT, ME,
NY, CT, MD, DE
• Program covers power generators > 25 MW
• Current cap = 188 million tons
• 10% reduction in 2009 CO2 levels by 2019
• Auction nearly 100% of allowances
• First compliance period begins Jan 1, 2009
3
RGGI Initial Goals
• Stabilize GHG emissions
• Create a market for carbon
• Demonstrate a state-led regional program can
work
• Professional, predictable auction model
• Aggressive investment in energy efficiency and
renewables
4
First Auction: RGGI on the Move
• September 25, 2008
• 12.5 million allowances auctioned
• 59 separate entities submitted bids, 44 entities purchased
allowances (80 percent sold to compliance entities)
• Demand outpaced supply 4:1
 $1.86 Reserve Price
 $3.07 Clearing Price
 $38.5 million total proceeds ($13.5 million to MA)
Market Monitor, Potomac Economics:
“Auction raised no material concerns…”
5
Second Auction:
December 17, 2008
Any Changes?
• All 10 RGGI states plan to participate
• 31.5 million allowances
• Clearing price and # of allowances sold released
w/in 48 hours of auction close.
• Post-settlement report (dispersion of bids, type
of bidder) released Jan 6
Auction schedule at:
http://rggi.org/docs/Auction_Schedule_Oct_13_2008.pdf
6
Where Will the Money Go?
Energy Efficiency & Renewable Energy:
Massachusetts, Maryland, New Hampshire,
New Jersey, New York
Consumer-Focused Programs (to reduce longterm energy demand and costs):
Connecticut, Delaware, Maine, Rhode Island, Vermont
7
RGGI funds in Massachusetts are
already being deployed
80 percent to energy efficiency:
• $6M: Fund 100 percent of electric utility companies
proposed winter 2008 efficiency program increases ($3M
from each auction)
• $3M: Help cities and towns implement energy efficiency
• $4M: Help low-income households be more energy efficient
through state’s HEARTWAP ($2M from each auction)
• $5M: Kick-start Green Communities Act
8
What’s Next for RGGI?
• Offsets
• Future areas of collaboration:
• Low carbon fuel standard (LCFS)
• CA LEV program (8/10 RGGI states have adopted)
• GHG reporting
− 10 states require GHG reporting: CA, CT, MA, ME, NV, NJ, NM,
OR, WA
− MA Global Warming Solutions Act requires GHG reporting
>5,000 tons/year in CO2e, including commercial/industrial
• Anticipated RGGI would expand to other sectors
9
What’s Next for RGGI?
• RGGI’s relationship to WCI and Midwest
Greenhouse Gas Accord
• What about Florida?
10
Federal Program
• RGGI designed as glide path for federal action
• RGGI has brought energy/environmental agencies
together in unprecedented ways.
• We will insist:
−
−
−
−
11
Strong state-federal partnership
Credit to states who have implemented GHG policy
Support at least at the RGGI level
State role: monitoring, reporting, permitting, energy efficiency,
siting & building renewables