PRESS RELEASE

Adirondack Council * Alliance for Clean Energy New York * Citizens Campaign for the Environment * Environmental Advocates of New York * Environmental Defense Fund * Hudson River Sloop Clearwater * Natural Resources Defense Council * NYPIRG * Pace Energy and Climate Center * Sierra Club – Atlantic Chapter * Western Climate Action Coalition 

September 15, 2008

NYS ENERGY RESEARCH & DEVELOPMENT AUTHORITY TO ADOPT RULES FOR COUNTRY’S 1^ST PLAN TO CUT CLIMATE POLLUTION

Environmental & Energy Groups Assert that Regional Climate Plan Will Not Burden New York Consumers

(ALBANY, NY)—The New York State Energy Research & Development Authority (NYSERDA) is expected to vote to adopt regulations to implement the Regional Greenhouse Gas Initiative (RGGI) in New York State today. The RGGI is the 10-state plan to reduce the power plant pollution that is changing our climate.

The adoption of these regulations sets the stage for New York to participate in the nation’s first auction of carbon dioxide (CO₂) permits as part of a cap-and-trade system that will hold the allowed level of CO₂ emissions constant through 2014, and then gradually reduce those levels. Along with New York, RGGI states include Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, Rhode Island and Vermont. The first auction of CO₂ emissions allowances is scheduled for September 25^th, and will include six of the 10 RGGI states. The remaining states—including New York—are on track to participate beginning with the second round on December 19^th.  

Environmental and energy groups have closely followed the progress of RGGI regulations and celebrated the State Environmental Board approval of Department of Environmental Conservation regulations for the plan in August. While the same groups applaud NYSERDA’s action today, the groups call into question claims by power producers that the regional climate plan will increase New Yorkers’ utility bills.

“Rising energy costs are a critical issue for all New Yorkers. In the long-run the Regional Greenhouse Gas Initiative will save consumers money and reduce the pollution that is changing our climate,” said Jackson Morris, Environmental Advocates of New York. “Statements by opponents to the regional climate plan about high costs are speculative and not based on sound analysis or research.”

According to research, for a typical New York residential customer, the projected increase translates into a retail bill increase of .78 cents. For commercial and industrial customers, the projected retail cost increase ranges from .9 to 1.7 percent in 2015, respectively.

“With the adoption of these regulations, we look forward to seeing New York begin auctioning pollution credits in December," said Laura Haight, senior environmental associate with NYPIRG. “This money should be strategically invested to benefit consumers and our environment. One of the biggest bangs for the buck is energy efficiency programs, such as home weatherization retrofits. This will save homeowners on their utility bills, reduce energy use, and create jobs in the private sector.”

The modest bill impacts and other figures put forth during the multi-year stakeholder process are based on extensive/sophisticated modeling conducted by numerous researchers and agencies, including NYSERDA, New York Department of Public Service, and others.

“RGGI is a crucial first step in combating climate change by helping to level the playing field between fossil fuels and renewable power,” said Carol E. Murphy, Executive Director of the Alliance for Clean Energy New York. “By investing the funds generated by the allowance auctions in efficiency and clean energy technologies we can provide long term relief from volatile fuel prices and build a more secure domestic energy supply,” added Ms. Murphy. 

For example, modeling conducted by the Massachusetts Division of Energy Resources shows that for the entire RGGI region doubling our investment in efficiency would result in recurring utility bill reductions from $66 to $109 per year. In general, these analyses found that economic effects of RGGI are small and positive.

“We need to preserve the strong link between how the proceeds from the RGGI auction are spent and the underlying causes of climate change,” said James Van Nostrand, Executive Director of the Pace Energy and Climate Center. “Using the proceeds for energy efficiency would preserve this link by reducing the need for electric generation, and would also provide long-term benefits for utility customers coping with the high costs of energy.” 

The RGGI was designed to reduce greenhouse gas emissions from Northeast power plants. In addition to the direct cuts associated with implementing the program that begins in January 2009, auctioning emissions allowances under RGGI also provides revenue for programs that can further reduce pollution.

“In 1984, New York created the nation's first cap-and-trade program for air pollution, aimed at controlling the smokestack emissions that causes acid rain. Critics said we were crazy to put ourselves at a competitive disadvantage by imposing rules on ourselves that other states weren't willing impose,” said Brian L. Houseal, Executive Director of the Adirondack Council, a national leader in the fight against acid rain. “But the very next year, New England states began to impose similar rules.  Five years later, Congress had amended the Clean Air Act to create a national program based on New York's model.  That is exactly what we hope will happen with RGGI and climate change. We just hope it happens faster.”

In the years ahead, strategic use of RGGI revenues can save New York consumers money by ramping up funding for programs such as the residential New York Energy Smart Loan Fund Program. Participants receive almost $500 in savings annually for 10 years, for a total of up to $4,650 in offset expenses on interest payments. Furthermore, a household would realize up to 40 percent reductions on their home heating and electric bills—savings that continue to accrue every month of every year into the foreseeable future. 

New York State is currently finalizing regulations and auction mechanics and will be ready for the second auction in December.

-30-