RGGI funds could help balance N.H. budget



Published:

Should New Hampshire take more than $3 million paid by utilities to reduce greenhouse gas emissions to help balance the state budget?That's among the questions lawmakers will answer later today if and when they vote on a proposed budget in a special legislative session.The budget proposal as it now stands would take $3.1 million from Regional Greenhouse Gas Initiative funds, money that was supposed to be used for energy conservation projects, and put it in the general fund.Ironically, the Legislature's special budget session is being held on the very day the next RGGI auction is being held.Under the budget plan, the state would seek to take $3.1 million in American Recovery and Reinvestment Act funds earmarked for various energy programs and direct it to a separate program -- the state Enterprise Energy Fund, which would provide energy audits and loans to businesses. But the state would need federal permission to do so.The maneuver is "a way of keeping RGGI whole for a year while freeing up general fund dollars," explained Marjorie Smith, chair of the House Finance Committee. Smith, who said that the alternative would man cutting services to the needy, added the taking the money is a way for the state to recover expenses the state used to help create fund, though she said she had no idea how much it cost the state to do so.Although the amounts taken from RGGI and expected to be used for the Enterprise Energy Fund are equal, and both programs were linked during a Tuesday House information session on the budget, they really have nothing to do with each other -- and the ARRA funds would have been used for some sort of energy conservation program anyway."These things should be decoupled," said Kathy Bogle Shields, executive director of the Community Development Finance Authority, which stands to gain those $3.1 million of recovery funds for the Enterprise Energy Fund. Not that Shields is complaining. Shields noted that there is a big demand for energy audits by business, "and we are thrilled to be able to expand our effort.""This is really a loss for energy conservation," said Cathy Corkery, director of the New Hampshire Sierra Club. "This is a disservice to companies that invested and participated in what they thought was a statewide program to reduce carbon, to just go and raid these funds. They need to take this out of the budget."Public Service of New Hampshire, which supplies most of the RGGI money, is not getting involved in this fight."The company has no position or opinion on the Legislature's consideration of the use of RGGI funds to help reduce the budget deficit," said Martin Murray, a PSNH spokesperson. "We are a regulated utility and must follow the law that the policymakers implement."RGGI, the first cap and trade carbon emissions program in the nation, was established by 10 Northeastern states, all of which signed a memorandum of understanding to set a regional emission cap of 88 million tons of carbon a year. Utilities like PSNH are required to buy an "allowance" to emit the equivalent of a ton of carbon at the RGGI quarterly auctions. Such allowances currently are going for about $2.On the RGGI Web site, the program is described as allowing the use of "the proceeds of allowance auctions to support low-carbon-intensity solutions, including energy efficiency and clean renewable energy, such as solar and wind power." In the RGGI memorandum of understanding, the states only are required to use 25 percent of their RGGI funds for such programs. In 2008, when the RGGI law was passed in New Hampshire, the debate was over whether to rebate some of the money back to customers, who feared that the allowances would be so expensive as to drive utility bills. But proponents argued that while RGGI might drive up electric rates, the average bill would remain stable, or might even go down, because conservation measures it financed would result in people buying less electricity.During that debate, nobody argued that the funds could be used to balance the state budget. Indeed, one of the arguments against RGGI was is that the state would grab the money rather tan use it toward energy conservation.The state has received some $18 million from RGGI auctions in 2008 and 2009, and it has spent most of it on various projects to increase energy efficiency in homes, schools and businesses. Currently it has $600,000 in the bank, according to Joanne O. Morin, director of the Governor’s Office of Energy and Planning. Today's auction is expected to raise another $3 million for New Hampshire.Morin, like Smith, said that the funds would be reimbursement to the state for RGGI-related expenses, both for unspecified administrative costs the state absorbed for setting it up and other state-sponsored conservation programs."Why should you take these funds to balance the budget?" Morin said. "Because the state has spent a lot of effort and resources developing programs for energy conservation and this is reasonable, given the dire economic situation the state is in now." -- BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW Edit ModuleShow Tags