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On the last day of the legislative session, Gov. Ruth Ann Minner signed into law legislation allowing the state to participate in a regional, 10-state greenhouse gas cap-and-trade program.
But the plan has drawn criticism from environmentalists, who say it is too weak, while power companies say it could lead to increased costs to consumers.
Delaware’s plan is to initially auction off just 60 percent of the total emissions allowances to the state’s polluters, meaning if they continue to pollute at the same rate, they have to pay for 60 percent of the total amount.
Environmentalists say the state should make polluters pay for all emissions allowances from the start, in keeping with other states participating in the Regional Greenhouse Gas Initiative (RGGI).
Sen. George Bunting, D-Bethany Beach, proposed an amendment to Senate Bill 263 that would have increased the allowances sold to 100 percent, but the amendment was defeated. Bunting said cap-and-trade plans need federal help, with incentives for power plants to upgrade their technology.
The state has 7.5 million carbon dioxide allowances under RGGI. Electric generators with capacity of 25 megawatts or more will have to purchase allowances for their emissions. RGGI seeks to cap carbon dioxide emissions at 188 million tons per year in the region until 2014, after which the cap will be lowered by 2.5 percent per year, for a 10 percent decrease by 2018. Companies would pay for the greenhouse gasses they produce as the states generally lower the cap.
Environmental group Green Delaware opposes the plan. The group said cap-and-trade systems will end up costing the public money in increased rates without actually decreasing carbon dioxide emissions.
Others are concerned that the state’s Sustainable Energy Utility will be given proceeds from the auction.
Delaware Audubon Conservation Chairman Nicholas DiPasquale was a member of the work group established by the Senate to make recommendations for the legislation. He and two other environmental representatives, Chad Tolman, energy chairman of Delaware Sierra Club, and Michael Fiorentino, executive director of the MidAtlantic Environmental Law Center, issued a minority report refuting the workgroup’s final recommendation.
DiPasquale said the minority group is concerned that 65 percent of the auction proceeds will go to the state’s Sustainable Energy Utility (SEU). “The SEU is supposed to offer private investor funding to help the energy needs of low-income people,” he said.
DiPasquale said the minority contingent wanted to see greenhouse gas emissions auction proceeds used to fund direct improvements on low-income housing.
Delmarva Power spokeswoman Bridget Shelton said Delmarva Power does not generate electricity in the state but would be affected by the legislation and so would its customers if the cost to generate power goes up as a result of the measure.
NRG Energy, owner of the Indian River power plant, could not be reached for comment.
RGGI is set to begin January 1, 2009.
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