Revision: Feb. 14, 2011, midnight
HB 519-FN – AS INTRODUCED
2011 SESSION
09/10
HOUSE BILL 519-FN
AN ACT repealing New Hampshire’s regional greenhouse gas initiative cap and trade program for controlling carbon dioxide emissions.
SPONSORS: Rep. R. Barry, Hills 19; Rep. Kurk, Hills 7; Rep. Mirski, Graf 10; Rep. Manuse, Rock 5; Rep. L. Vita, Straf 3; Sen. Forsythe, Dist 4; Sen. De Blois, Dist 18; Sen. White, Dist 9
COMMITTEE: Science, Technology and Energy
This bill repeals New Hampshire’s regional greenhouse gas initiative cap and trade program for controlling carbon dioxide emissions.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
11-0475
09/10
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eleven
AN ACT repealing New Hampshire’s regional greenhouse gas initiative cap and trade program for controlling carbon dioxide emissions.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Findings. The general court finds that:
I. There has been no credible economic analysis of the costs associated with carbon dioxide emissions reduction mandates and the consequential effect of the increased costs of doing business in New Hampshire.
II. Businesses, industries, and food producers have been forced to reduce carbon dioxide emissions as a result of government mandates and cap and trade policies through the regional greenhouse gas initiative, which has increased the cost of doing business, pushed companies to do business with other states or nations, and increased consumer costs for electricity, fuel, and food.
III. The Congressional Budget Office warns that the cost of cap and trade policies will be borne by consumers and will place a disproportionately high burden on poorer families.
IV. Simply reducing carbon dioxide emissions in New Hampshire will not have a significant impact on international carbon dioxide emissions reduction, especially while countries like China, Russia, Mexico, and India emit an ever-increasing amount of carbon dioxide into the atmosphere.
V. Economic growth has been and will be sacrificed for a reduction in carbon dioxide emissions that would have no appreciable impact on global concentrations of carbon dioxide.
VI. No state or nation has enhanced economic opportunities for its citizens or increased gross domestic product through cap and trade programs or other carbon dioxide emissions reduction policies.
VII. Europe’s cap and trade system has been undermined by political favoritism and accounting tricks and has failed to achieve its carbon dioxide emissions reduction targets.
VIII. Therefore, New Hampshire’s regional greenhouse gas initiative cap and trade program for controlling carbon dioxide emissions should be repealed.
2 New Paragraph; Energy Efficiency; Renewable Energy, and Conservation and Load Management Incentive. Amend RSA 125-O:5 by inserting after paragraph III the following new paragraph:
IV. For expenditures made by PSNH independent of SBC funds for energy efficiency, new renewable energy projects, or conservation and load management, the department shall provide emissions allowances to PSNH equivalent to the amount of such allowances that could have been purchased at market prices by the same dollar amount as the expenditure made. Such expenditures shall be consistent with the core energy efficiency programs approved by the public utilities commission or other programs acceptable to the department and shall, to the greatest extent practicable, result in immediate, demonstrable energy improvements.
3 Powers and Duties of Commissioner; Reference Deleted. Amend RSA 125-O:6, I to read as follows:
I. Develop a trading and banking program to provide appropriate compliance flexibility in meeting the emission caps established under RSA 125-O:3, III [and allowance requirements of RSA 125-O:21 and RSA 125-O:22], and to encourage earlier and greater emissions reductions and the development of new emission control technologies in order to maximize the cost-effectiveness with which the environmental benefits of this chapter are achieved.
4 Rulemaking Authority. Amend RSA 125-O:8 to read as follows:
125-O:8 Rulemaking Authority.
[I.] The commissioner shall adopt rules under RSA 541-A, commencing no later than 180 days after the effective date of this section, relative to:
[(a)] I. The establishment of trading and banking programs as authorized by RSA 125-O:6, I.
[(b)] II. The establishment of a method for allocating allowances and other emissions reduction units or mechanisms as authorized by RSA 125-O:3, II and III.
[(c)] III. Emissions [and allowance] monitoring, [tracking,] recordkeeping, reporting, and other such actions as may be necessary to verify compliance with this chapter.
[(d) The method and requirements for auctioning budget allowances under RSA 125-O:21, which may use regional organizations.
(e) Defining eligible projects for early reduction allowances under RSA 125-O:21, IV, and establishing criteria to quantify and grant such allowances.
(f) Defining eligible projects for offset allowances under RSA 125-O:21, V, and establishing criteria to quantify and grant such allowances, including the accreditation of third-party verifiers.
(g) The forms and information required on applications for a temporary or operating permit required under RSA 125-O:22.
II. The public utilities commission shall adopt rules, under RSA 541-A, to administer the greenhouse gas emissions reduction fund pursuant to RSA 125-O:23.]
5 Compliance Dates. Amend RSA 125-O:9 to read as follows:
125-O:9 Compliance Dates. The owner or operator of each affected source shall comply with the provisions of this chapter, excluding the subdivision on mercury emissions, RSA 125-O:11 through 125-O:18, [and the subdivision for CO2 emissions, RSA 125-O:19 through RSA 125-O:28,] by December 31, 2006.
6 Non-Severability. Amend RSA 125-O:10 to read as follows:
125-O:10 Non-Severability. No provision of [RSA 125-O:1 through RSA 125-O:18 of] this chapter shall be implemented in a manner inconsistent with the integrated, multi-pollutant strategy [or RSA 125-O:1 through RSA 125-O:18] of this chapter, and to this end, the provisions of [RSA 125-O:1 through RSA 125-O:18 of] this chapter are not severable.
7 Energy Consumption Reductions Goals: Reports; Reference to Board Deleted. Amend RSA 21-I:14-c to read as follows:
III. Beginning in calendar year 2012, the commissioner shall submit an annual report to be made available to the public on or before December 1 compiling the annual reports submitted under paragraph II, with findings on the departments’ annual progress in complying with the energy consumption reduction goal established in paragraph I and problems which may prevent the departments from achieving this goal, to [the energy efficiency and sustainable energy board established under RSA 125-O:5-a,] the governor, the senate president, the speaker of the house of representatives, the chair of the senate energy, environment and economic development committee and the chair of the house science, technology and energy committee.
8 Lapse of Funds. Moneys in the greenhouse gas emissions reduction fund on June 30, 2011 shall lapse to the general fund.
9 Repeal. The following are repealed:
I. RSA 6:12, I(b)(272), relative to moneys deposited in the greenhouse gas emissions reduction fund.
II. RSA 125-O:3, III(d), relative to carbon dioxide cap.
III. RSA 125-O:5-a, relative to the energy efficiency and sustainable energy board.
IV. RSA 125-O:19 through 125-O:28, relative to the regional greenhouse gas initiative.
10 Effective Date. This act shall take effect July 1, 2011.
LBAO
11-0475
Revised 02/14/11
HB 519 FISCAL NOTE
AN ACT repealing New Hampshire’s regional greenhouse gas initiative cap and trade program for controlling carbon dioxide emissions.
FISCAL IMPACT:
The Public Utilities Commission and Department of Environmental Services state this bill will have an indeterminable fiscal impact on state, county, and local expenditures and will decrease state, county, and local revenue by an indeterminable amount in FY 2012 and each year thereafter.
METHODOLOGY:
The Public Utilities Commission and Department of Environmental Services state this bill repeals the Greenhouse Gas Emissions Reduction Fund (GHGERF) and the Regional Greenhouse Gas Initiative (RGGI) cap and trade program for controlling carbon dioxide emissions. The Commission states GHGERF is funded by the sale of NH RGGI allowances and is distributed as grants to fund energy efficiency projects for citizens, nonprofits, businesses, and governmental entities. The Commission states RGGI allowances have been trading at or close to the auction floor price for the last two quarters, with some allowances going unsold. The Commission assumes the economy will continue a slow recovery keeping demand for electricity and allowances low. The Commission states if RGGI is repealed state restricted revenues to the GHGERF would be reduced by approximately $9,868,556 in FY 2012 and each year thereafter ($1.89 floor price of allowances * 5,221,458 New Hampshire Annual Allowances). The Department of Environmental Services assumes the economy may recover faster and since FY 2012 is the start of a new compliance period, the Department estimates FY 2012 revenues will mimic those at the start of the last compliance period in FY 2009 of approximately $18.2 million. However, the Department notes because RGGI allowance prices may vary significantly based on projected emissions, the cap level, the point in time in the three-year compliance period, electricity demand, and fuel prices, the exact change in state restricted revenues cannot be estimated at this time.
Additionally, state restricted expenditures of GHGERF grants for energy efficiency projects would be reduced by between $9,868,556 and $18.2 million. To the extent state, county, and local entities apply for and receive GHGERF grants for energy efficiency projects, state, county, and local restricted revenues would be reduced by an indeterminable amount in FY 2012 and each year thereafter.
The Public Utilities Commission assumes RGGI will stay in effect throughout the other New England states where generators would continue to purchase RGGI allowances and incorporate that cost into their dispatch bids on the wholesale market. PSNH is the only utility in New Hampshire with a generation facility required to purchase RGGI allowances. If RGGI were repealed the direct cost for PSNH to purchase these allowances will be reduced. The Commission states PSNH has estimated this cost to be $3.3 million in FY 2011. The Department of Environmental Services states if allowance prices in 2012 (the start of a new compliance period) are similar to 2009 (the start of the last compliance period), the cost to default service customers would be reduced by $5,083,000 (based on the marginal demand for electricity in calendar year 2009 multiplied by the marginal cost of allowances in 2009). However, the Department notes for calendar year 2011, the PSNH costs related to RGGI were only $3,528,422 (based on the marginal demand for electricity in calendar year 2011 multiplied by the marginal cost of allowances in 2011). The Commission and Department estimate state, county, and local government is approximately six percent of the electric market. To the extent state, county, and local governments are default PSNH customers, state, county, and local expenditures may decrease in FY 2012 and each year thereafter.