Warnings realized in RGGI budget raid

The Business and Industry Association of New Hampshire was not surprised that the Legislature in a June 9 special session 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 by 11 states in RGGI.Under RGGI, emissions from power plants throughout the Northeast are capped at 88 million tons, with each state auctioning off a proportional share of “allowances” (New Hampshire “gets” about eight 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.”Gahal 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.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.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 up utility bills. But proponents argued that the average bill would remain stable, or might even go down, because conservation measures it financed would result in people buying less electricity.

A ‘cookie jar’?During that debate, nobody argued that the funds could be used to balance the state budget. Indeed, one of the arguments against RGGI was that the state would grab the money rather than use it toward energy conservation.As part of the budget deal, lawmakers 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 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 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.”
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. the day before the vote. “We are a regulated utility and must follow the law that the policymakers implement.”Jim O’Brien, executive director of Conservation New Hampshire, noted that the state has 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.”Bob Sanders can be reached at bsanders@nhbr.com.