RGGI 62nd Auction and 2023 in Review: An Additional $411 million Raised for Clean Energy

For Release: December 22, 2023

BOSTON, MA – On Wednesday, December 6, 2023, the eleven states participating in the Regional Greenhouse Gas Initiative (RGGI) released the results of the 62^nd auction for 2023. Emissions allowances were sold for $14.88 each, generating $411.5 million for clean energy investments in participating states.

“The incredible success of this auction speaks volumes—$411.5 million raised brings RGGI’s cumulative total to a staggering $7.16 billion,” stated Paola Tamayo, Policy Analyst at Acadia Center and co-author of the organization’s RGGI Third Program Review Report. “What’s even more exciting is that both the proceeds from allowances and the clearing price hit record highs in this 62nd auction, marking a historic moment for RGGI as the program nears the conclusion of its Third Program Review.”

The allowance price for the RGGI program is the highest in 2023 and remains above the historical average. The Cost Containment Reserve (“CCR”), a market mechanism that releases extra allowances beyond the cap which are sold if prices exceed predetermined levels, was triggered in this auction. The Trigger Price of $14.88 per ton of CO₂ was met, and 5,565,291 CCR allowances were sold in the auction. The Emissions Containment Reserve (ECR) retains allowances for additional emissions reductions if prices fall below the trigger price of $6.87 in 2023. Notably, the ECR remains well below the average 2023 price and has historically not been triggered.

Higher RGGI allowance price is good for climate, clean energy investment

The clearing price of $14.88 in 2023 marks a continuation of the upward trend observed in recent years. This clearing price represents a 15% increase from the clearing price in December 2022. In total, the average 2023 auction price is only 0.2% higher than the average 2022 auction price. The positive trajectory witnessed in the 2023 auctions holds promising implications for the RGGI program. Having higher allowance prices seen in 2022 and 2023 means that the RGGI program is sending a stronger incentive to produce electricity from carbon-free sources, like wind and solar. Recent auctions demonstrate the growing significance of the CCR – this recent auction was the first time since 2021 that additional allowances were released because of triggering the CCR. The triggering of the CCR results in an influx of additional allowances into the market, which means that it’s potentially lowering the overall stringency of the emission reduction targets.

Since the program launched, the vast majority of RGGI proceeds have been invested in energy efficiency and clean energy projects, as detailed in the most recent report on RGGI investments in 2021, released in June of this year.

The $411.5 million in proceeds generated in this auction brings the cumulative to-date total to $7.16 billion. The 2023 auction results underscore RGGI’s significance as more than a regulatory framework, emphasizing its influence on the shift towards sustainable energy. RGGI states show the practicality of a collaborative, market-driven strategy for reducing greenhouse gas emissions. Notably, this year’s proceeds are 81% higher than the combined proceeds from 2019 and 2020 and stand 6% higher than the proceeds recorded in 2022.

RGGI Third Program Review Offers an Opportunity to Direct Proceeds Towards Clean Energy Investments that Directly Benefit Environmental Justice Communities

Since its establishment, RGGI’s priorities have centered around reducing pollution from fossil fuel power plants and achieving climate solutions for RGGI states. Every five years or so, RGGI undergoes a program review, giving the participating states the opportunity to consider the program’s performance and make various changes, including the equitable disbursement of the program’s proceeds. RGGI’s Third Program Review is happening now and will likely conclude early next year. In 2023, RGGI held two public meetings and two public comment periods to discuss and seek feedback on various aspects of the program. Acadia Center, other stakeholders, and the public at large await any responses from the states to public input on setting the cap and improving overall program design and operation.

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As discussed in more detail in Acadia Center’s most recent RGGI Report, there are many different ways in which RGGI can start to ensure that environmental justice communities are heard and are actively involved in the development of strategies for an equitable transition to a carbon-free economy. Regardless of how strongly the Third Program Review does or does not prioritize environmental justice, it should remain a priority for individual states to consider the recent auctions, the history of investments across the states, the need to benefit environmental justice communities directly, and other mechanisms associated with the cap-and-invest program.

Acadia Center remains closely involved in RGGI policy conversations across the RGGI states and will continue to advocate for program reforms that drive equitable investment and climate action.

Media Contacts:

Ben Butterworth, Director: Climate, Energy, and Equity Analysis
bbutterworth@acadiacenter.org, 617-742-0054 x111

Paola Moncada Tamayo, Policy Analyst
ptamayo@acadiacenter.org, 860-246-7121 x204

Technology to “Get more out of” electric grid attracts support

BOSTON, Mass. (SHNS)–Clean energy trade groups lined up Thursday in support of a new proposal from legislative Democrats that would embrace lower-cost, easy-to-install options for boosting the performance of the electric grid.

Bills filed by the House and Senate point people on energy and climate reforms, Rep. Jeffrey Roy and Sen. Michael Barrett, won praise as “commonsense” changes that could help the state move closer to its clean energy future without the same kind of major investment that other reforms will require.

“Put simply, grid enhancing technologies are often incredibly cost-effective technologies that help us maximize our existing infrastructure,” added Kyle Murray, Massachusetts program director with the Acadia Center.

To read the full article, click here.

Op-Ed: Amid the climate doom, a bright spot in Mass.

I imagine the Department of Public Utilities (DPU) isn’t exactly top of mind for most Massachusetts residents. The three-member body, which is appointed by the governor, regulates our electric, natural gas and water utilities, and oversees some aspects of the state’s transportation safety guidelines.

Its proceedings are wonky and can be difficult to understand, but its decisions can have a tremendous impact, affecting everything from your monthly utility bills, to whether a new gas pipeline will be permitted, to the types of incentives offered by the Mass Save energy efficiency program.

On Dec. 6, the DPU made a historic decision — for the better. The order was the result of a three-year process, initiated by then-Attorney General Maura Healey, during which the state has been considering the future of the natural gas industry. In the most basic of terms, the order represents a pivot point in the state’s strategy for decarbonizing the buildings sector, which was responsible for 36% of Massachusetts’ carbon emissions in 2020. It puts in motion a plan to transition away from the natural gas distribution system that utilities operate today. Even more plainly: this decision by DPU is one big, important step of many to stop the use natural gas once and for all in the state, a reality that was unthinkable outside of environmental circles even five to 10 years ago.

It was the culmination of years of work, in an arena where environmental advocates like me aren’t accustomed to seeing many wins. (Historically, we’ve tried “not to lose” when appearing before DPU.)

So, how’d it happen? When the state Legislature passed the Climate Roadmap law in 2021, it updated the DPU’s mission to consider reductions in greenhouse gas emissions for the first time ever. Environmental advocates were hopeful for change, but initially, the three commissioners seemed to continue relegating greenhouse gas emissions to an afterthought. For example, just last year, the nonprofit I work for, Acadia Center and others, argued before the DPU that a proposal to provide gas service to a town that previously did not have it was at odds with Massachusetts’ climate goals and not in the public interest. We noted that the town involved did not reasonably consider reasonable alternatives, like electrification. But our arguments were rejected — and the town received approval for gas service.

Things started to change once Gov. Healey took office last January. The DPU members she appointed, including Commissioner Staci Rubin (formerly of the Conservation Law Foundation) and Jamie Van Nostrand (who spent a long time fighting the coal industry in West Virginia), promised to create a “21st century DPU.”

And what they delivered earlier this month was an unequivocal win for the commonwealth: a win for climate, a win for public health, a win for environmental justice, and a win for consumers. We hear a lot about what’s wrong with government these days — think partisan rancor and gridlock in Congress — but this is a clear example of what government can accomplish, and a decision that will put us on the right path to meet our state’s decarbonization targets. 

As an environmental advocate, you sometimes feel like the Greek myth Cassandra, cursed with the ability to see the future but never believed. You feel as though you are presenting cold, hard facts and data, but you’re told your ideas are pie-in-the-sky. Therefore, it’s incredibly gratifying to read this order, which validates those arguments and flips the traditional narrative.

The order is too long to fully summarize here (check out the summary in our press release). The most important thing to understand is that it covers concepts at the macro-level (such as preventing so-called “renewable” natural gas into the general gas supply, because of questions about its cost, availability and results, in terms of emissions reductions) and at the micro-level (like changing the way gas utilities can recover rates to disincentivize adding new gas customers).

The order also affirmed the state’s commitment to electrification, envisions the large-scale decommissioning of the natural gas system, and requires coordinated planning between gas and electric utilities (which had not previously been required).

As impressive as this decision by the DPU is, it’s only a midpoint, not the end, and will require careful and thoughtful implementation. What will result from this order is a broader process that will span many years if not decades. But the decision this month will set the other key dominos in motion. As the DPU states, for this order’s vision to be implemented, many legislative changes are required too.

I look forward to working with the House, the Senate, and the governor to deliver on those changes and deliver on the promise of a decarbonized future.

To view the original article from wbur, click here.

Rhode Islanders Deserve a Comprehensive Plan to Reduce Transportation Emissions

This November, the Rhode Island Department of Transportation (RIDOT) released and submitted its Carbon Reduction Strategy (CRS) to the Federal Highway Administration. The development of a state-specific Carbon Reduction Strategy was required by the U.S. Department of Transportation’s (U.S. DOT) Carbon Reduction Program (CRP)¹ and will provide over $35 million to reduce emissions in the transportation sector in Rhode Island over a five-year period ². This is a solid injection of funding, but – at an average of $7 million per year – it is quite a small amount relative to RIDOT’s overall capital projects budget in the State Transportation Improvement Program (STIP), which was over $900 million in 2023.³

The transportation sector represents the largest proportion of GHG emissions in Rhode Island; as such, the development of a strategy to reduce carbon in the transportation sector, driven by RIDOT, is critical to helping Rhode Island meet the greenhouse gas emission reduction mandates outlined in the 2021 Act on Climate law. However, the investments proposed by RIDOT in its CRS do not address the scale of emissions reduction needed to move the needle. This strategy can and should go much further and seek to deliver many more benefits to Rhode Island commuters and communities.

For the state to align emissions reductions in transportation with state climate law, a proper evaluation of total and project-specific GHG emissions will need to be undertaken. Outside of three large congestion management projects, RIDOT does not calculate project-level emissions reductions associated with its transportation investments. The wide variety and scale of projects considered not only for CRP funding but also for $9 billion in Statewide Transportation Improvement Program (STIP)⁴ funding require distinct emissions reduction analyses. In particular, RIDOT must consider meaningful investments in strategies that reduce vehicle miles traveled (VMTs) and promote mode shift to cleaner mobility alternatives, such as public transit, walking, biking, and more.

Earlier this year, in July, Acadia Center took the lead in reconvening a coalition around transportation decarbonization, motivated by the limited information provided to-date surrounding RIDOT’s Carbon Reduction Strategy (CRS). Acadia Center convened monthly meetings of advocates and conveyed the group’s concerns during public comment at multiple Transportation Advisory Committee, State Planning Council, and Executive Climate Change Coordinating Council meetings. Our coalition pushed RIDOT to open a public comment period and invest more funds in mode shift, and we mobilized a broad range of members of the public to comment on the CRS. Though we still have serious concerns regarding RIDOT’s approach to engagement, mode shift, and carbon reduction, RIDOT’s release accompanying their revised Carbon Reduction Strategy (CRS) in November noted the value of public input and shifted the allocation of remaining funds to place a much greater emphasis on mode shift, to the tune of a 170% increase.⁵

Acadia Center has also been in dialogue on these topics with our partners in organized labor through the Climate Jobs RI coalition. Part of getting this shift in mindset and planning right will mean doing right by the union construction workers who have helped build and maintain Rhode Island’s transportation infrastructure for decades. As a result, that means we and other advocates are thinking carefully about novel ways to ensure that the shift in project types, infrastructure, and transportation modes does not come at the expense of work opportunities, labor standards, or certain trades. We are optimistic nonetheless that the low-carbon transportation projects of the future – from rail and bike networks to ports and beyond – can support a just and equitable transition for our workforce.

Upcoming opportunities for robust public process and investments in mode shift and non-car infrastructure include the revision of the Division of Statewide Planning’s Public Participation Plan (which applies to RIDOT) and the next allocation of STIP funding. Like the advocate contributions that shaped RIDOT’s revised CRS, more public input is needed to shape transportation planning and decision-making moving forward. Acadia Center will continue to support state agencies and collaborate with fellow advocates and community-based organizations to bring both needed attention and strategies and investments that meaningfully reduce transportation emissions and put Rhode Island on track to meeting its climate goals.

A final note: we are mindful that many teams within RIDOT will in the coming weeks and months be focused on the urgent situation facing the I-195 bridge, following the emergency closure on December 11. The timely repair and remedy of the issues facing the bridge are obviously of paramount importance for a swift return to a safe commute for drivers and passengers. We hope that support for shifting modes where feasible can be a part of the solution to address the resulting traffic impacts in the interim as well.

For more information:

Joy Yakie, Environmental Justice and Outreach Manager, jyakie@acadiacenter.org, 617-742-0054 x110

Emily Koo, Senior Policy Advocate and Rhode Island Program Director, ekoo@acadiacenter.org, 401-276-0600 x402

1 The CRP is a provision of the 2021 Infrastructure Investment and Jobs Act (also known as the Bipartisan Infrastructure Law) and is intended to help states design projects to reduce greenhouse gas (GHG) emissions in the transportation sector for the 2022 – 2026 fiscal years.

2 RI DOT has already spent $13.1 million of CRP funding on existing projects in the Statewide Transportation Improvement Program, with over half of those funds allocated to congestion management projects. The remaining $22.6 million will be allocated and spent between the release of the Strategy (November 2023) and the end of FY 2026.

3 STIP Program Allocation Summary, 2022-2031 Revision 9 with Pending Changes, https://planning.ri.gov/sites/g/files/xkgbur826/files/2023-11/Section_2_STIPFinal%20MTP%2011-3-23_0.pdf

4 The STIP is a list of transportation projects the State of Rhode Island intends to implement using United States Department of Transportation funds. https://planning.ri.gov/stip

5 Funding for bike path construction and improvement, while not new bicycle infrastructure, did more than quadruple, and funding was also allocated to RIPTA bus stop accessibility and early implementation of commuter rail service.

Mass. efforts to limit natural gas could serve as national model

ENERGYWIRE | Massachusetts will require utilities to pursue alternatives to natural gas in a first-of-its-kind order that could serve as a model for other states trying to speed their transition to clean energy.

The sweeping order is “fairly unprecedented, even at a national level,” said Kyle Murray, director of state program implementation at the Boston-based environmental group Acadia Center. The state move comes as a major gas utility in the state — Eversource Energy — already works to reduce natural gas demand and switch to geothermal energy.

To read the full article from E&E News, click here.

Massachusetts just took a major step to phase out natural gas

To read the full article from Fast Company, click here.

Centering Underserved Communities, and Uplifting Underrepresented Leaders in Connecticut’s Climate and Clean Energy Advocacy Efforts: Lessons from Puerto Rico

On October 18, 2023, Acadia Center Climate and Energy Justice Policy Associate, Jayson Velazquez, presented a keynote address at the Latine and Puerto Rican Voices for Climate Action Roundtable at the Legislative Office Building in Hartford, Connecticut. The Roundtable was convened to raise awareness about how climate change impacts Latine communities in Connecticut and how climate change and clean energy solutions can bridge gaps to combat environmental and energy injustice.

In that speech, Jayson called for the following:

• Rejecting the expansion of fossil fuel facilities and fossil fuel infrastructure
• Committing to well-compensated, unionized, green jobs – specifically in and with environmental justice communities.
• Factoring in the social cost of carbon – in decision-making and economic modeling
• Embracing clean heating and energy efficiency in homes – including reallocating funds in inflation-adjusted dollars to the energy efficiency programs and restoring the amount borrowed from the 2024 Conservation and Load Management Plan to cover 2023 demand.
• Supporting multifamily energy efficiency and tenant protection – including rent stabilization on units receiving energy efficiency upgrades in environmental justice communities
• Reinstating free and fair public transportation
• Intentionally developing stakeholder engagement processes – that provide childcare, transportation, food, compensation, language interpretation and translation, ensure physical accessibility, and operate at multiple times.
• Providing space for people and communities to be heard first and foremost – understand and honor the value and depth of community knowledge, expertise, and experience.
• Connecting these issues to livelihood – understand that these issues have to connect to keeping the lights on, a roof over the heads of families and individuals, and food on the table.

As a follow-up to the Roundtable, Jayson was invited by the Connecticut Green Bank to attend the Solar and Energy Storage Association (SESA) Summit of Puerto Rico. The SESA Summit provided context about Puerto Rico’s grid modernization pathways, distributed energy resources, and striking a balance of equitable stakeholder engagement and providing reliable . Solar and battery storage were highlights of the conference, and Sunnova Energy International Inc. touted their Sentient Virtual Power Plant platform, which utilizes distributed solar and energy storage aimed at enhancing grid stability during peak demand periods. Plenty of nuance is needed to understand how Puerto Rico’s current grid development fits into historic and ongoing energy and environmental injustices. Hurricanes Irma and Maria in 2017 exacerbated financial disparities and debt that contributed to the destruction of already disinvested infrastructure. Community leaders are hopeful that the influx of Federal funding to develop solar energy in Puerto Rico will be allocated towards community-driven, decentralized rooftop solar, energy resilience and microgrids, and community solar such as that of Casa Pueblo.

Left to right: Jayson Velazquez, Climate and Energy Justice Associate at Acadia Center; Sergio Carrillo Managing Director, Incentive Programs at the Connecticut Green Bank; Alex Rodriguez, Environmental Justice Specialist at Save the Sound

There are lessons to be applied from Puerto Rico in Connecticut, where 17.7% of the population identifies as  Hispanic or Latino, and of that half identifies as Puerto Rican. Opportunities to support Puerto Rican and Latine communities in Connecticut can come from climate and clean energy solutions and advocacy approaches that are culturally competent, inclusive from their foundations, and equitably distributed in their benefits and burdens. As Connecticut considers grid modernization, enhancing grid stability during peak demand periods through distributed energy resources and increased energy efficiency, our Latine communities cannot be left behind. Connecticut climate and clean energy advocates have an opportunity to center underserved communities through policy and solution design and implementation, workforce development programs, education, and equitable stakeholder engagement. Leading Puerto Rican environmental and energy advocates and organizers in the state include Alex Rodriguez from Save the Sound who led a coalition in support, design, and advocacy for S.B. 1147: An Act Concerning the Environmental Justice Program of the Department of Energy and Environmental Protection. Leticia Colon de Mejias is another well-known leader who holds numerous state and federal positions and conducts Efficiency for All’s nationally recognized workforce development programs, energy and environmental justice organizing, and equity advocacy. Acadia Center remains engaged by advocating for climate and clean energy solutions that uplift and support underrepresented communities and center environmental and energy justice.

The COP is the Scoreboard, not the Game

For two weeks every December, the giant global climate meeting—this year with at least 70,000 delegates, lobbyists, activists, and journalists enjoying the tacky spaceport that is Dubai—provides a cascade of feelings. This year that intensity is concentrated on a sentence in the “global stocktake” section: there’s much drama around whether it will include the phrase “phaseout of fossil fuels.” This morning’s update: Canada, gentle giant of the north, has been drafted to draft the relevant sentence.

In other energy and climate news:

+A perfect example of great activism paying off. In Massachusetts, which has some of the best climate organizers on the planet, Governor Maura Healey (elected in part because of her true climate bona fides) has now made it clear that natural gas will be, what do you know, phased out in the Commonwealth. As Sabrina Shankman reported in the Globe,

The Massachusetts Department of Public Utilities examined, and ultimately rejected, proposals from the utilities to meet the state’s climate objectives by replacing natural gas with so-called renewable natural gas, typically methane captured from organic materials, like landfills or livestock operations.

The DPU found that option costly, in short supply, and not a clear climate fix, though it said it may be the best option for certain industries where it’s hardest to find an alternative to natural gas.

Climate and clean energy advocates cheered the news. “This is potentially the most transformational climate decision in Massachusetts history,” said Kyle Murray, Massachusetts program director at the clean energy advocacy group the Acadia Center.

To read the full article from the Crucial Years, click here.

Massachusetts Just Took a Big Step Away from Natural Gas. Which States Might Follow?

Natural gas may be on the way out in Massachusetts.

State utility regulators on Wednesday issued a sweeping ruling that sets a framework for reducing the use of gas for heating as part of a larger strategy to address climate change.

The Massachusetts Department of Public Utilities rejected arguments from utilities and the gas industry that had urged the use of “renewable natural gas” and hydrogen as lower-carbon alternatives to natural gas. Instead, the department ruled that the state should encourage a transition to using electricity for heating and other functions gas currently serves.

Massachusetts is the first state to take such a clear step to phase out natural gas, but it likely won’t be the last. At least 11 other states (California, Colorado, Illinois, Maryland, Minnesota, Nevada, New Jersey, New York, Oregon, Rhode Island and Washington) as well as Washington, D.C., have ongoing regulatory cases that are exploring the future of natural gas.

The decision “has the potential to be one of the most transformative decisions in Massachusetts climate history,” said a statement from Kyle Murray, director of state program implementation at Acadia Center, a Maine-based environmental advocacy group.

To read the full article from Inside Climate News, click here.

Massachusetts Moves to Limit New Gas Infrastructure

Massachusetts has moved to discourage new investment in natural gas infrastructure by blocking utilities from recovering costs unless they can show they first considered non-gas alternatives. 

The order issued Dec. 6 by the Department of Public Utilities in Docket No. 20-80 follows more than three years of work by the DPU to engineer a reduction in the state’s greenhouse gas emissions.  

But it is only a first step, an attempt to discourage and dissuade rather than to ban. Ratepayer discretion is preserved, and the order’s effectiveness will depend in large part on the decisions they make. 

There are many more steps to come as the DPU works to balance all the moving pieces, competing interests and still-unknown factors to create a climate-protection solution that is workable, affordable and equitable. 

The Acadia Center, which had been pushing for a strong statement by the DPU, applauded Wednesday’s order, calling it a potentially transformative measure that addresses many of the clean energy advocacy group’s priorities. 

Eversource Energy and National Grid, which combined have more than 1.5 million gas customers in the Bay State, said in separate statements they support the state’s net-zero goals and are reviewing details of the 140-page order. 

The Acadia Center said: “The 20-80 order today from the DPU has the potential to be one of the most transformative decisions in Massachusetts climate history. … That being said, implementation and follow-through will be incredibly important, as always. Thoughtful planning by the Department and the commonwealth will be needed to ensure positive outcomes on key areas such as customer affordability, a just transition for gas workers, and infrastructure planning and management. This order therefore serves as an important midpoint in a multiyear process, as this decision will now lead to other key dominos like evaluation of gas utility stranded asset risk, decoupling mechanism revisions, systematic consideration of non-gas pipeline alternatives, and reassessment of gas utility policies on new and existing customer connections.”

To read the full article from RTO Insider, click here.