|
Delaware could soon inch closer to participating in a greenhouse gas cap-and-trade program with nine other states. Enabling legislation is expected on the measure, based on a report issued earlier this month. But three members of the work group that issued the report have published a minority statement, opposing key pieces of the final report.
The report calls for revenue from the sale of greenhouse gas allowances to go to the state’s Sustainable Energy Utility. But the minority members - who support the goals of the cap-and-trade program - now say they oppose sending funds to the utility because of how it has been set up.
They say the final report does not accurately or fairly reflect the work of the full workgroup.
Chad Tolman, energy chairman of Sierra Club Delaware; Nick DiPasquale, conservation chairman of Delaware Audubon; and Michael Fiorentino, executive director of the Mid-Atlantic Environmental Law Center all say they disagreed with the report before it was released. They say the report omits important information and suggestions that were made on behalf of Delaware’s environmental community.
Delaware was one of the original seven states that signed a memorandum of understanding to form the Regional Greenhouse Gas Initiative (RGGI), now a group of 10 states working to cap and eventually decrease greenhouse gas emissions.
But the state can’t begin to participate in the program without enabling legislation. Last year, Senate Concurrent Resolution 28 established a workgroup to outline a strategy for the state to sell off its 7.5 million carbon dioxide allowances and distribute the revenue. Each allowance is equal to a ton of carbon dioxide emissions, said Tolman. Electric generators with capacity of 25 or more megawatts will have to purchase allowances for their emissions. RGGI seeks to cap carbon dioxide emissions at 188 million tons per year until 2014, after which the cap will be lowered by 2.5 percent per year, for a 10 percent decrease by 2018. As a result of the initiative, companies would have to pay for the greenhouse gasses they produce while states gradually lower the cap.
The debate in Delaware is over how much of the total allowances to auction off, said Tolman. While many RGGI states are set to auction 100 percent of their allowances, the Delaware workgroup, with representatives of the Department of Natural Resources and Environmental Control (DNREC), electric companies and the environmental community, recommended auctioning only 50 percent, said Tolman. When the auction begins, companies will not have to pay for the other 50 percent of allowed pollution.
Tolman said that plan gives a windfall profit to the generators.
“We are in favor of starting the auction at 100 percent. That will raise the most money and have the most impact on greenhouse gas emissions,” Tolman said.
The three environmentalists also disagree with how the final report says the profits from auction will be used. The Sustainable Energy Utility (SEU), created last year and chaired by Sen. Harris McDowell, D-Wilmington North, would receive revenue from the auction to encourage energy efficiency or other energy-related goals. The final report recommends up to 65 percent of proceeds from RGGI auctions go into the SEU. “The SEU was created to promote energy conservation and energy efficiency. But the way it is structured doesn’t allow for much accountability or transparency,” said Tolman.
“Most workgroup members believe the SEU is the correct vehicle to furnish efficiency, conservation and renewable programs; however, a few have asserted the SEU was to have been financially self-sustaining and would not need the additional revenue,” reads the final report.
“We want to see diverse representation on the board. Sen. McDowell failed to do that, so we failed to support it. We support energy conservation; however, we don’t support RGGI funds going to support the SEU,” said DiPasquale. Phil Cherry of DNREC is writing enabling legislation for RGGI. He said he has read the minority statement, but the legislation he is writing will be based on the majority report and will not cite the minority view.
Recommendation of RGGI work group:
• 60 percent auction of allowances ramping to 100 percent in five years (8 percent annual increments)
• Up to 65 percent of the allowance proceeds shall be directed to the SEU for energy efficiency and renewable energy deployment
• Up to 15 percent of the allowance proceeds shall be directed to low-income consumers through state programs
• Percentage allocations of funds to the SEU and low-income consumers may be reviewed and adjusted annually by a committee composed of the secretary of DNREC, the chairman of the SEU, the directors of state weatherization and other programs
• Up to 10 percent of allowance proceeds be directed to “Greenhouse Gas Reduction Projects” with the fund controlled by the DNREC secretary (with an industry and environmental advisory group)
• Up to 10 percent of allowance proceeds dedicated to DNREC’s administration (off the top)
|
