There are two key concerns raised by opponents of HB 519-FN. The first is that we won't receive RGGI proceeds but will still have to pay for CO₂ allowances used by power producers in neighboring states that are still in RGGI. The second is the concern that saving the small cost of the RGGI allowances pales in comparison to the good works that are done by RGGI grants.
When the vote came up, the democrats on the committee had left for another committment, so only the republicans voted, and all voted in favor.
True enough, but this misses two things. First, withdrawing from RGGI is not the ultimate goal. We want to dismantle RGGI to end the allowances and auctions. While New Hampshire's energy production and consumption is too small to disrupt RGGI, the House's veto-proof approval of the repeal was loud and strong in New Jersey. Their legislature introduced bills in each branch last September, and our actions have gotten New Jersey's attention and will encourage them to press forward.
If New Jersey withdraws from RGGI, that will have a big impact. New York is also talking about leaving RGGI, and I'm sure that talk has become more earnest. I don't know what other states are doing yet, but I created a new web page to track that activity, see http://wermenh.com/rggiwatch/index.html .
Last December, an article in The Union Leader said:
An average residential customer of Public Service of New Hampshire pays about 6.5 cents a month for those allowances - or $5 million in total in 2010, according to a utility spokesman.
Jack Ruderman, who heads the sustainable energy division at the New Hampshire Public Utilities Commission, said New Hampshire's proceeds from the sale of carbon allowances have totaled about $28 million since December 2008.
The Union Leader mentions the 6.5 cents again in House votes for NH to exit cap-and-trade program. Note the disingenuous use of reporting the cost for one year, but reporting the return for the entire 2.5 year RGGI life. http://www.rggi.org/docs/NH_Proceeds_by_Auction.pdf has auction data for New Hampshire. The proceeds for 2010 (auctions 7-10) are just over $10 million. The proceeds for Auction 10 were just $1.67 million and if that is maintained for 2011, NH will see only $6.7 million in 2011. My guess is that power producers have stocked up on enough allowances at the $1.86 floor price and may need to buy very few allowances this year, and maybe next. Do not expect a windfall this year!
At the Feb 10 state house hearing, NH Public Radio reported:
Public Service of New Hampshire has estimated that to be about 36-cents a month for the average household.6.5 cents, 36 cents, I assume there's no auditor's report to go with the claims. Which is it, why are there two figures, and how were they derived? I don't know yet, but there's a simplistic way to derive an interesting value.
Take the costs to ratepayers for RGGI allowances. A quote above was for about $5 million in 2010.
The 2000 US Census counted 474,606 households in NH, let's call it 0.5 million now. That's $10 per household per year, or $0.83 per month. I believe the difference is due to estimates in increased efficiency, either by the power producers or improvements funded by RGGI dollars. However, assigning all these improvements to RGGI is both quite a reach and won't track future allowance pricing.
The winning auction bids for the last few auctions have been at the $1.86 per ton auction floor. This is not what people anticipated for the typical allowance by now. The intention was that allowances become more scarce and that demand would grow over time. My $0.83 per month estimate could easily become 5X greater in the foreseeable future.
One of the authors is both a PhD candidate at UNH and is also involved with Cameron Wake's Carbon Solutions New England, an organization devoted solely to reducing CO₂ emissions in New Hampshire. It may be independent, but by no means is it neutral!
Contact Ric Werme or return to his home page.
Written 2011 March 6, last edited 2011 March 9.