RGGI proceeds miss N.H. budget mark


New Hampshire raised slightly less than the amount lawmakers expected in last week's quarterly Regional Greenhouse Gas Initiative auction, which means the state will have to dip in to current RGGI funds or proceeds from future auctions when it takes the money to balance the state budget.The state will receive $2.96 million from the $80.5 million raised in the June 9 auction of some 40 million greenhouse gas allowances. The auction was held on the same day the Legislature voted to grab $3.1 million of RGGI funds, to help balance the budget. At the time, experts had hoped that the auction would raise more than $3 million for the state.But the allowances for the current control period (2009-2011) sold for $1.88, the lowest price yet. When the RGGI auction process began, current allowances were selling for more than $3, peaking at $3.51. But the allowance price dropped as the economy slowed, and electricity usage fell off, partly because of energy conservation measures -- some of which were the result of RGGI proceeds. During the last auction, when current allowances went for $2.07, New Hampshire raised $3.23 million.Future allowances, for the next three-year control period sold for $1.86 on June 9, matching the record-low price reached last quarter.In a release announcing the auction, RGGI touted conservation measures as the benefit of the initiative."States are investing these proceeds in consumer benefit programs that further reduce emissions, save consumers money and create jobs. Overall, states are investing the vast majority of proceeds to improve energy efficiency and accelerate the deployment of renewable energy technologies," said the release."Every dollar invested in energy efficiency and renewable energy advances the clean energy economy," said Amy Marrella, Commissioner of the Connecticut Department of Environmental Protection."Expanded efficiency programs, funded in part by RGGI, will generate roughly $6 billion in consumer energy savings in Massachusetts over the next three years," said Phil Giudice, Commissioner of the Massachusetts Department of Energy Resources.But RGGI member states are only required to invest a quarter of the auction proceeds in energy conservation, and they are increasingly raiding RGGI to support their general funds. New Jersey took $65 million of the $72.9 million raised so far for its budget, and New York grabbed $90 million of the $243.2 million it has raised.New Hampshire’s budget calls for $3.1 million to come from RGGI funds, out of the $24.35 million raised thus far. That will mean it will have to make up the difference from current RGGI funds that have not been allocated yet, or whatever is raised during the next auction, scheduled for September 8While supporters of the move said that the RGGI raid was a one-time reimbursement for unspecified startup and administrative costs to get the program up and running in 2008, critics worry that it might be the first of many such raids. They also are concerned that the raids might undermine either the regional 11-state program, or a similar proposed national cap and trade program, which would eventually replace RGGI. -- BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW
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