Warnings realized in RGGI budget raid


The Business and Industry Association of New Hampshire was not surprised that the Legislature on Wednesday took $3.1 million in Regional Greenhouse Gas Initiative funds to help balance the state budget."We warned everybody two years ago that this is a big pot of money that is ripe for the plucking, and that’s exactly what happened," said David Juvet, the organization's vice president. Indeed, the raid happened without any real debate at all. In fact, the only other RGGI-related proposal – backed by Republicans – was to take even more money from the fund. Unlike other dedicated funds that were raided to close this budget gap, RGGI money doesn't come from various taxes and fees that the New Hampshire Legislature created on its own. It is raised through an understanding forged by 11 states in RGGI -- an initiative now considered a model for national cap and trade legislation. Under RGGI, emissions from power plants throughout the northeast are capped at a total of 88 tons, with each state auctioning off a proportional share of "allowances" (New Hampshire "gets" about 8 million a year) with the funds raised used either for energy-efficiency programs or rebated back to the ratepayers. "The issue has been that the funds were intended to be invested in energy efficiency since that would help reduce consumer utilities bills," explained David Gahal, policy director of the organization Environment Advocates New York. "That was one of the main drivers to begin with." Gahl is concerned not necessarily about New Hampshire's raid, but also because New York state lawmakers grabbed $90 million in RGGI funds last December. Shortly afterwards, New Jersey followed suit taking $65 million in the last budget year. And "the governor left the door wide open for next year. They are taking it all," said Matt Elliott of Environment New Jersey. Since the first greenhouse gas emissions auction in September 2008, New Hampshire has won $21.4 million in RGGI funds, with some $18.9 million awarded to date. Some of the money was awarded and not yet spent and other money has been obligated and not yet raised. Currently, New Hampshire has about $5.6 million in RGGI funds in the bank, with $640,000 not spoken for. As part of the budget deal, lawmakes voted to spend the exact same amount of American Reinvestment and Recovery Act funds appropriated for another conservation program -- the Enterprise Energy Fund, which provides energy audits and loans to businesses, if the state obtains federal permission to do so. But much of the RGGI money also goes to businesses, and the ARRA money has already been awarded to the state for energy conservation. All lawmakers did Wednesday is specify where those ARRA funds are going. "I think it just means less money to allocate to new proposals," said Jack Ruderman, director of the Division of Sustainable Energy for the Public Utilities Commission, which hands out the RGGI funds. State Rep. Naida Kaen, D-Lee, prime sponsor of the legislation enabling New Hampshire's RGGI participation and the chair of the House Science, Technology And Energy Committee, echoed the justification of legislative leadership and the governor's office for taking the RGGI money. The state devoted some resources to get RGGI started and so the "agencies should be compensated," she said. And she said there is some comfort that ARRA funds earmarked for energy conservation will actually be spent that way. "We couldn’t spend ARRA funds to plug a hole in the budget, but money is fungible. It’s like electrons." Still she added, she was "disappointed" and hoped that it "isn’t a precedent." "If anybody's got some skin in the game, it’s me, but I’m pragmatic," she added. "However, I’ll be there fighting to make sure nothing more happens." Jim O’Brien, executive director of Conservation New Hampshire, said he's worried that this year's RGGI raid won't be the last. "The BIA said this was what was going to happen," said O'Briend. "There is a big pot of money, and it was something real that was out there." He noted that the state has set aside a dedicated fund for the Land and Community Heritage Investment Program, or LCHIP, by taxing deeds and mortgage filings, and that fund has already been repeatedly raided, including this year for $1.5 million. "Once they dip their hand in the cookie jar, they know they can go there again," he said. "New Hampshire is undermining its commitment to energy efficiency." Indeed, the BIA's Juvet said that there was never any certainty that this money would go to energy conservation. Unless there are some constitutional projection, that money could be used for whatever the legislature wants. "They acted like there was this impenetrable wall around the fund," he said. "No way. This is just another tax on electricity users. The rates were already high, and now they are higher." -- BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW
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