RGGI report: N.H. benefits, but not as much as others

New Hampshire gets fewer economic benefits than any of the 10 states participating in the Regional Greenhouse Gas Initiative, according to a report touting those benefits.But the report, released Tuesday, might have underestimated how much the Granite State gets out of the program.New Hampshire received a net economic benefit of $17 million and has added 150 jobs a year over the three years since the cap and trade program went into effect in 2008, according to the report, which was put together by the Boston-based consulting firm Analysis Group and released by the National Association of Regulatory Utility Commissioners.That’s a small fraction of the $1.6 billion benefit ($33 per capita) and 5,378 yearly jobs gain enjoyed by the 10-state region as a whole.The benefit was determined by factoring out the $912 million spent by power plant owners in buying allowances to emit carbon dioxide and other gases that contribute to global warming.That has caused utility bills to go up in the near term, but the report contends that the amount spent on electricity actually fell over the period because the states invested a substantial amount of proceeds from the allowance auctions on emergency efficiency that reduced demand.That lowered demand not only created a downward pressure on prices for everybody, but it also meant lower usage by those who took advantages of the programs.Thus, despite the increase in prices, there was a net gain of $1.1 billion for ratepayers. That works out to a $25 savings for residential consumers, $181 for commercial customers and $2,493 in industrial consumers, the report finds.In addition, consumers of natural gas and heating oil saved another $174 million, the report claims.This drop in power demand, however, resulted in a double whammy to generators that saw a revenue decrease of $1.6 billion.Still, the report claims, the savings enabled consumers to spend their money elsewhere, and the programs themselves generated jobs that more than made up for what the utilities lost in revenue. The more states put money into conservation, the greater the net economic benefits, the report says.And that may be why the report underestimated New Hampshire’s benefits.New Hampshire is small state, of course, but report finds that RGGI provided a larger economic impact in other states, like Vermont ($22 million), Rhode Island ($69 million), Delaware ($63 million) and Maine, ($92 million.)None of these other small states grabbed RGGI money to balance their budgets. New York, New Jersey and New Hampshire did so, however.New Hampshire diverted $3.1 million in order to balance its budget in fiscal 2010, but the report instead says that $9.3 million was diverted to the general fund, and that only $21.5 million of the $32.9 million in RGGI funds was used for energy efficiency and other utility programsWhen asked about the discrepancy, report co-author Susan Tierney explained that extra $6.2 million diversion reflected “our conservative approach for handling situations where money literally had not issued in the form of grants.”Once that money is issued, the state economic benefits presumably might be higher. Tierney said that it would be issuing a posting to explain the matter in further detail.The state Department of Environmental Services says that some $31.1 million had been awarded to energy efficiency programs by December 2010.”They understated the benefits,” said Bob Scott, director of the state Air Resources Division. “I don’t mind that. I’d rather they be conservative. My issue is how they labeled those [$6.2 million] funds. They didn’t go in the general fund.”Whatever the final figures, the report is likely to add ammunition to both sides in the debate over the state’s continued participation in RGGI.Republicans who control the Legislature have generally been critical of the program, but have been divided over whether to reform it, by taking it out of the hands of the Public Utilities Commission or repealing it outright. Gov. John Lynch has threatened to veto any repeal, arguing that utility rates will go up anyway, since much of the state’s power is generated elsewhere, but the state would be shut out of the benefits.The Conservation Law Foundation issued a press release responding to the report saying that it indicates that “we should be doing more RGGI, more often, in more places.”But Rep. James Garrity, R-Atkinson, chair of the House Science, Technology and Energy committee, was skeptical and said he wanted to examine the report closely.”I want to look at the numbers and the assumptions behind these supposed economic benefits,” said Garrity, who backed a total repeal of RGGI last session. “What I care about is what the ratepayers are paying now, and all I know is that I’m paying more.” — BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW

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