When the world convened recently in Bonn, Germany, for the annual United Nations climate-change negotiations, there was a particular focus on the role of U.S. states, cities and businesses in reducing carbon pollution. Massachusetts, along with six other states and the District of Columbia, announced a regional pledge to work together with stakeholders to “create the clean transportation system that the region needs to meet today’s and tomorrow’s challenges.”
Cleaning up and modernizing the transportation system will be a major undertaking, but it doesn’t have to be a painful one. Massachusetts has demonstrated the ability to address similar challenges through innovative policies and regional collaboration that reduce emissions while improving the economy. The commonwealth played a key role in launching the Regional Greenhouse Gas Initiative (RGGI), the nation’s first multi-state program to reduce carbon pollution from power plants.
While RGGI has helped Massachusetts make great strides in reducing electric sector pollution, the transportation sector still emits around the same amount of carbon as it did in 1990. Every year, pollution from the transportation sector causes asthma attacks and leads to preventable deaths, taking a massive financial and human toll on Bay State residents. Making matters worse, low-income communities and communities of color face a disproportionate share of the impacts from this pollution.
We can’t transform our transportation system overnight, but we can do more to invest and plan for a better future. From electric vehicle infrastructure to smart growth and improved public transit, we have an array of options to reduce pollution and increase transportation access while benefiting the economy. A RGGI-like program could go a long way to accelerate the adoption of these transportation solutions.
The RGGI cap-and-invest model has helped cut emissions from power plants in the region by 40 percent since 2008, while driving $2.8 billion in regional economic growth and creating nearly 30,000 jobs. Acadia Center analysis shows that RGGI has helped the region outpace the rest of the country in both emissions reductions and economic growth. In Massachusetts alone, these RGGI-driven emissions reductions have resulted in $798 million in avoided health costs.
Recent analysis conducted for the Transportation and Climate Initiative (TCI) shows that regional carbon policy — like a cap-and-invest program — would add billions of dollars to the regional economy, reduce harmful pollution and generate revenue for reinvestment in transportation improvements, accelerating the transition to a cleaner, more efficient, more accessible system. A recent report from Ceres and M.J. Bradley and Associates found that the benefits of investments in electric vehicle infrastructure outweigh the costs by a margin of three to one.
Expanding clean transportation options should be a top priority for our economy. Businesses want 21st century cities with transportation systems to match, and they’ve proven to invest resources and create jobs in areas that have them. To keep Massachusetts’ economy thriving, we must embrace clean transportation. Market-based solutions like the RGGI model offer a promising path forward, and we urge Governor Baker and his peers across the region to act swiftly in establishing such a program.
Mindy Lubber is president and CEO of Ceres, a sustainability nonprofit organization. Daniel L. Sosland is president and executive director of Acadia Center, a nonprofit, research and advocacy organization.
MEDFORD, MA—On January 11, 2018 stakeholders from across the northeast region will gather at The Fletcher School of Law and Diplomacy at Tufts University for “The Future of Transportation Symposium: Innovation, Technology & Policy,” a one-day conference co-hosted by Acadia Center and The Fletcher School’s Climate Policy Lab in their Center for International Environment and Resource Policy, and in partnership with Transportation for Massachusetts (T4MA) and other allies.
The symposium will serve as a forum for conversations about how the region can address transportation pollution, access, and innovation from academic, policy, and business perspectives.
The conference follows the November announcement at COP23 in Bonn, Germany by seven states—Massachusetts, Connecticut, Rhode Island, Delaware, New York, Maryland, Vermont, and Washington, D.C.—that they will explore regional climate policies for the transportation sector by holding listening sessions in the coming months. Massachusetts Governor Charlie Baker’s administration recently held several well-attended listening sessions, generating input from many members of the public and groups that want to see progress in this area. “The Future of Transportation Symposium” is an opportunity for stakeholders and policy makers to gather and discuss the best approaches and practices to shape state and regional transportation policy.
The symposium will also highlight the leadership of Massachusetts in working to promote modern, forward-looking transportation policies. Matthew Beaton, Secretary of Energy and Environmental Affairs, will open the day’s activities with an address about the future of transportation in Massachusetts and across the region.
In addition to T4MA, symposium partners include the Environmental League of Massachusetts and the Metropolitan Area Planning Council.
WHAT: The Future of Transportation Symposium: Innovation, Technology & Policy – convened by The Fletcher School’s Climate Policy Lab and Acadia Center
WHO: Matthew Beaton, Secretary of Massachusetts Executive Office of Energy and Environmental Affairs; Barbara Kates-Garnick, Professor of Practice at The Fletcher School and former Undersecretary of Energy for the Commonwealth of Massachusetts; Daniel L. Sosland, President, Acadia Center
When Hurricane Maria hit Puerto Rico on September 20, it plunged the island into a devastating power outage. This NOAA satellite photo shows visible lights in Puerto Rico and the U.S. Virgin Islands before the storm (July 24) and after (October 13). It took two months to restore more than half of normal peak load electricity, as of early-December, almost a third of households are still in the dark.
In May, Acadia Center released EnergyVision 2030: Transitioning to a Low-Emissions Energy System, a comprehensive analysis that demonstrates how seven Northeast states can spur use of market-ready technologies that empower consumers, control energy costs, and advance economic growth while lowering carbon pollution. EnergyVision 2030 presents a practical path to a clean energy future where electricity produced by solar, wind, and other renewable technologies powers our cars and provides efficient heating; where residents and businesses anchor an integrated grid, with power flowing between consumers and among smart appliances and batteries, within energy efficient buildings; and where community energy provides equitable access to renters, low-income ratepayers, and those who cannot site clean energy at their own homes. EnergyVision 2030 is ambitious, optimistic, and achievable.
In September, Hurricanes Irma and Maria devastated Puerto Rico, leaving 3.4 million people without power, clean water, food, or cell phone service. Almost three months later, a third of the island is still in the dark. While officials warn that it will take many more months and many billions of dollars to repair the island’s electricity transmission and distribution system and restore some sort of normalcy, creative thinkers are asking what might be possible if—instead of fast-tracking huge investments in rebuilding Puerto Rico’s troubled, traditional grid— Puerto Rico builds an affordable clean energy system of the future.
This clean energy future would be a significant departure from Puerto Rico’s pre-hurricane energy system, which depended heavily on fossil fuels and resulted in the highest retail electricity prices for American citizens outside of Hawaii. Despite including both the Caribbean’s largest solar farm and its largest wind farm, renewable energy supplied only 2.4% of Puerto Rico’s electricity in 2016. That’s far short of the 2010 Renewable Portfolio Standard (“RPS”) requiring the Puerto Rico Electric Power Authority (“PREPA”) to get 12% of its electricity from renewable sources starting in 2015, scaling up to 15% by 2020 and 20% by 2035. Missing the RPS target is not PREPA’s only problem. The agency’s debt tops $9 billion, its infrastructure is old and failing, and service is often unreliable. The bottom line is that Puerto Rico was ripe for grid modernization even before Hurricane Maria wiped out the grid.
Weaving strategic grid modernization into emergency response will require sensitivity, and Acadia Center’s EnergyVision lays the foundation for ambitious, achievable reforms anchored by clean energy technologies in four core areas:
Grid Modernization: Advocates on Puerto Rico and the mainland are abuzz with the potential of a modern system of microgrids. These localized grids incorporate renewable generation and battery storage to avoid the need for expensive long-distance transmission and distribution lines, and are more resilient than traditional, centralized grids. The impact of Hurricane Maria bears this out: though the storm took out 80% of transmission lines, it damaged only 10-15% of solar panels. Functioning panels weren’t able to deliver power to the now-destroyed grid, but interconnecting those panels through local microgrids would be particularly useful, especially given Puerto Rico’s terrain of forests and mountains through which it is difficult to maintain power lines. Renewable energy companies have stepped up since the hurricanes: German energy storage manufacturer Sonnen already has six microgrids up and running, with nine more installations planned in coming weeks; Tesla deployed solar and storage to restore power at San Juan’s Children’s Hospital and has announced six new battery projects on two Puerto Rican islands. Taxpayer-funded disaster relief should encourage innovations like these to lend immediate support to traumatized Puerto Ricans and to demonstrate the potential of a smart, clean, modern grid.
Electric Generation: Puerto Rico has ample renewable resources, yet last year, petroleum supplied nearly half of the island’s electricity, and natural gas supplied nearly one-third. Solar power is the fastest source of clean, renewable generation. As of June 2017, Puerto Rico had five utility-scale solar farms with 127 megawatts of capacity, and more than 8,500 customers with nearly 88 megawatts of distributed capacity connected with net metering. Expanding grid-scale and distributed renewable generation to achieve and surpass RPS targets will mitigate high fuel costs, advance energy independence, reduce emissions, and support a more resilient energy system.
Buildings: Energy efficiency and clean building-cooling and water-heating technologies have already provided cost savings and emissions reductions in Puerto Rico. The island utilized funds from the American Recovery and Reinvestment Act to weatherize more than 15,000 homes, cutting electricity use by an average of 15%, and to install more than 11,000 solar hot water heaters. As it rebuilds, Puerto Rico should maintain its requirement that all new single-family homes have solar hot water heaters, and also require minimum efficiency standards for homes, municipal, and commercial buildings.
Transportation: Hurricane Maria severely damaged Puerto Rico’s critical transportation infrastructure, including highways, bridges, traffic signals, and fuel stations. Immediate recovery efforts focused on clearing and repairing roads and reopening gas stations to facilitate relief efforts and restore local and regional bus service. Longer term efforts should recognize the potential of electric vehicles and innovations in mobility options to improve transportation efficiency and resiliency, and strive to build a robust network of electric vehicle charging stations.
EnergyVision 2030 calls for a resilient, low-emissions energy system that benefits communities every day, and especially in the face of extreme weather events and volatile global fuel markets. Acadia Center advocates in the Northeast for a consumer-friendly grid, clean distributed generation, and efficient buildings and transportation, but this can and should be pursued everywhere. Puerto Rico needs this critical help now.
NEW YORK — Acadia Center, Alliance for a Green Economy, Citizens for Local Power, Natural Resources Defense Council, The Public Utility Law Project of New York, and Vote Solar today launched a campaign to decrease one of New York’s most regressive and unfair charges for utility service: the fixed charge, an unavoidable monthly fee that all residential electric customers must pay regardless of the amount of electricity they use.
New York has very high fixed customer charges compared to other states, which can make energy unaffordable for many households and discourages investments in energy efficiency and renewable energy.
For example, National Grid has a residential fixed charge of $17 in New York, but only $5 in Rhode Island and $5.50 in Massachusetts. Central Hudson has even higher fixed charges at $24, which it is seeking to increase to $25, as well as add an additional tiered “service size charge” for many customers. Acadia Center found that current average residential customer charges for major investor-owned utilities are higher in New York than in all of its neighboring states.
A newly launched website, www.lowerfixedcharges.org, explains why a majority of utility customers would substantially benefit from lower fixed charges and contains original analysis and supporting information, including:
A letter signed by more than 130 New York public officials requesting that state regulators reduce fixed charges in New York;
Articles and op-eds on fixed charges;
Expert analysis on the consumer, economic, and environmental benefits of lowering fixed charges in New York; and
Opportunities for consumers make their voices heard on this issue by giving them the ability to submit comments in the National Grid and Central Hudson rate cases and the Reforming the Energy Vision (REV) proceeding.
Cullen Howe, Acadia Center’s New York director, said: “Fixed charges remain a stubborn and pressing problem in New York as it looks to modernize its energy system and give customers more control over their energy bills. Most states across the country use a definition for residential fixed charges that is much narrower than New York’s approach. This new web campaign gives New Yorkers valuable information on why residential fixed charges are too high and what they can do to address this problem.”
“We see no reason why utility customers in New York should be paying fixed charges that are three times higher than those paid to the same company by customers in other states,” said Jessica Azulay, program director of Alliance for a Green Economy. “It’s high time to reduce these charges so that low-income customers, low energy users, and people who want to invest in energy efficiency and renewables are no longer overburdened with these regressive and unfair costs.”
“A key goal of the Governor’s Reforming the Energy Vision Initiative is to empower New Yorkers to manage their energy use in a way that both supports the State’s clean energy goals and also reduces their bills,” said Jen Metzger, Director of Citizens for Local Power. “Lowering utility fixed charges must be part of this reform effort because high fixed charges prevent customers from realizing the savings that they should when they use less energy or install solar panels on their homes.”
Miles Farmer, a clean energy attorney at the Natural Resources Defense Council, said: “For New York to lead in developing utility regulation for the future, it must end its practice of high unavoidable fixed charges and instead design utility rates to encourage customers to save energy and install advanced technologies that will help them use energy even smarter.”
“New York has an energy affordability crisis, where as much as 50% or more of energy consumers chronically struggle to pay their vital bills like heat, light or medicine, due in large part to high energy prices,” said Richard Berkley, Executive Director of the Public Utility Law Project of New York. “High fixed charges worsen those affordability problems for low- and fixed-income and low-usage customers, and they disincentivize conservation. Both of those results are contrary to the State’s low-income affordability program and REV program goals. This coalition is dedicated to lowering high fixed charges to address those affordability concerns for New York’s vulnerable households, and also to help the State meet its renewable energy goals by helping consumers get ‘more green for less green.’”
Nathan Phelps, Program Manager at Vote Solar, said: “Families and business owners should be reaping the benefits of solar and wind energy, which are more affordable than ever, especially compared to traditional fuels. Instead, New Yorkers pay unnecessarily high fixed fees on their utility bill, regardless of how much electricity they use. Instead of passing on savings to customers, New York utilities are making it more expensive for them to invest in private solar, efficiency, and other clean energy technology. This brand new resource will shed light and offer solutions to New York’s high customer fee problem.”
Cullen Howe, NY Director
email@example.com, 212-256-1535 x501
Krysia Wazny, Communications Director
firstname.lastname@example.org, 617-742-0054 x107
“I do think it would have a devastating effect,” William Dornbos, a spokesman for the energy activist organization Acadia Center, said of early reports that the bipartisan budget proposal would rely in part on taking those energy funds.
“If the proposed severe cuts in energy efficiency and clean energy ratepayer funds happen, Connecticut’s economy, quality of life, and fight against local air pollution and climate change will suffer a major setback,” Dornbos said.
He warned that, Connecticut will immediately start bleeding good-paying efficiency and solar jobs to other neighboring states that are investing more, not less, in these promising economic sectors,” according to Dornbos.
“This will hurt in multiple ways… These ratepayer-funded programs drive in-state job growth and economic activity that put many millions of dollars in tax revenue into the state treasury,” Dornbos said. “Ratepayer fund raids just make state budget deficits worse.”
Read the full story from the Hartford Courant here.
BOSTON — The American Council for an Energy-Efficient Economy (ACEEE), a national nonpartisan organization, released its 2017 State Energy Efficiency Scorecard today, with Massachusetts holding the #1 rank for the seventh straight year, Rhode Island climbing to #3, Vermont at #4, and Connecticut at #6. Maine and New Hampshire were ranked #13 and #21, respectively.
New England states’ rankings in the category of utility and public benefit efficiency programs are even more impressive. Together, these programs represent the single largest state policy-driven impact on greenhouse gas emissions in the region. The efficiency investments driven by these programs have brought tremendous energy and bill savings to the region’s residents. They have also halted the growth of peak electric usage and its associated need for expensive new transmission projects. Rhode Island was first in this category, followed by Massachusetts, Vermont, and Connecticut. Maine was ranked twelfth, and New Hampshire sixteenth.
“Maximizing efficiency is a major step toward putting the region on the path to the clean energy future detailed in Acadia Center’s EnergyVision 2030 report. The New England states are showing that deploying least-cost, non-polluting measures effectively reduces the need for expensive fossil fuels. The leading states are successfully using this approach to spur economic development while also benefitting the environment and consumers, who enjoy lower costs and healthier, more comfortable spaces in which to live and work,” said Dan Sosland, Acadia Center President.
Massachusetts is leading the way with a current 3-year efficiency plan (2016‑2018) that is expected to deliver $8.1 billion in economic benefits and energy savings, as well as environmental benefits equivalent to removing approximately 408,000 cars from the road. The plan sets annual savings goals (2.93% of sales for electric and 1.24% of sales for natural gas) that are the highest in the nation, yet again. In 2016, Massachusetts programs far exceeded these goals, achieving savings of 3.34% of sales for electric efficiency.
“Massachusetts holds the first-place ranking alone this year—and for an amazing seven years running—but there is still plenty of work to do to make the most of this low-cost, clean resource,” said Amy Boyd, Senior Attorney at Acadia Center. “We should applaud our success, but not rest on our laurels. We must return to the hard work that it takes to accelerate strategies to reach the homes and businesses that still need help lowering their energy costs,” Boyd said. “Making smart use of all the data that new technologies can provide will reduce costs, make processes more transparent and keep us on track to stay on top of the evolving ACEEE scoring criteria.”
Rhode Island’s Least Cost Procurement law is primarily responsible for the state’s continued leadership on energy efficiency. First implemented a decade ago and extended for another five years in 2015, the policy states that distribution companies cannot acquire new electric or natural gas supply until “all cost-effective” energy efficiency measures have been exhausted. However, recent actions by Rhode Island state government, including a diversion of $12.5 million in ratepayer funds collected for energy efficiency, will make it difficult for the state to maintain its ranking next year.
“By investing in low-cost energy efficiency instead of expensive electricity and natural gas, Rhode Island lowers energy bills and spurs economic growth,” said Erika Niedowski, Rhode Island Policy Advocate with Acadia Center. “Energy efficiency reduces the cost of doing business in Rhode Island, and when residents spend less money on energy, they have more left in their paycheck to spend locally on other things.”
A widening gap has emerged between the electric efficiency programs of Massachusetts, Rhode Island, and Vermont and other states, with Vermont achieving 65% more savings than Connecticut. These three leading states have fully embraced efficiency as a resource, just like electric generation, and are choosing the lower-cost option of efficiency. The second tier of energy efficiency performers, Connecticut, Maine, and New Hampshire, finished the year with a mix of improved performance in some areas and need for improvement in others. Maine continues to achieve respectable savings levels and leads the nation in the deployment of clean, efficient heat pumps, despite a difficult political environment for clean energy. New Hampshire’s new Energy Efficiency Resource Standard promises to finally put that state on a path to reducing energy waste. Even with this progress, New Hampshire, as well as Connecticut and Maine, have plans to achieve only about half the electric efficiency savings that Massachusetts did in 2016.
“Connecticut dropped a spot to #6 this year, an indication that its historical commitments to energy efficiency are not enough. As other states are making big gains, Connecticut is only cutting half the energy waste it can,” said Kerry Schlichting, Connecticut Policy Advocate with Acadia Center. “Leaving these savings on the table is a loss for residents and businesses. Officials should reevaluate opportunities for future efficiency gains through increasing savings targets, addressing languishing appliance standards and tackling energy waste in state buildings.”
“It is unfortunate to see that Maine’s ranking dropped for the first time in five years, falling two spots to #13,” said Acadia Center Maine Policy Advocate Kathleen Meil. “As other states ramp up their commitment to energy efficiency, Maine’s drop demonstrates that standing still means falling behind.”
“Despite the temporary dip in savings and spending in 2016 for both the electric and natural gas programs, New Hampshire’s new Energy Efficiency Resource Standard (EERS) promises to finally put that state on a path to reducing energy waste,” said Ellen Hawes, Senior Analyst at Acadia Center.
“New England is on the right path, far ahead of some other regions, but there is still work to do to make the most of this clean resource. The states need to find better ways to weatherize older buildings, integrate new technologies, and accelerate strategies to reach all types of homes and businesses,” said Jamie Howland, Director of Acadia Center’s Energy Efficiency and Demand Side Initiative.
As a member of efficiency stakeholder boards in multiple states, Acadia Center looks forward to working with fellow members, utilities and other stakeholders to make sure that the plans are implemented effectively to deliver cost savings through lower utility bills, emissions reductions, and clean energy job growth, in addition to broader economic benefits.
HARTFORD, CT — More than sixty labor, religious, environmental and business leaders gathered on Wednesday to discuss the development of offshore wind energy in New England and to call for Connecticut to act quickly to secure a share of the jobs and economic activity.
The half-day forum, hosted by the International Brotherhood of Electrical Workers (“IBEW”) Local 90 in Wallingford, was organized by the CT Roundtable on Climate and Jobs and Acadia Center, with co-sponsorship from the Connecticut Port Authority and the Greater Hartford-New Britain Building and Construction Trades Council.
Following the gathering, the CT Roundtable on Climate and Jobs is submitting a letter, endorsed by more than 120 people representing more than 55 towns across the state, as a public comment on the state’s Draft Comprehensive Energy Strategy (“CES”). The letter urges the CT Department of Energy and Environmental Protection (“DEEP”) to revise the draft CES to incorporate a meaningful commitment to offshore wind energy, taking advantage of planned development in pre-designated federal waters south of Massachusetts and Rhode Island.
“By taking advantage of lessons learned from neighboring states, Connecticut can develop a robust offshore wind strategy that leverages our modern port facilities and skilled labor pool to capture a share of the benefits of this emerging regional resource,” said John Humphries, organizer for the CT Roundtable on Climate and Jobs.
“Under legislation passed this year, DEEP now has the authority to procure offshore wind energy. Rather than including any recommendation that Connecticut take advantage of even that limited authority, however, the draft CES downplays the opportunity,” said Kerry Schlichting, Policy Advocate at Acadia Center. “The state must establish a clear path to securing a share of the regional economic and environmental benefits from offshore wind or risk losing out to its neighbors like New York and Massachusetts.”
So far Connecticut has lagged behind its neighboring states in creating a long-term energy strategy that embraces offshore wind. The Block Island Wind Farm off the coast of Rhode Island is operational, Massachusetts is actively reviewing offshore wind project bids, and New York, Maryland, and New Jersey are all developing their own ambitious programs. The scale of this offshore wind development presents an enormous economic opportunity for Connecticut’s deep-water ports, coastal communities and workers. To catch up and capture its share of this new economic opportunity, the state needs to develop a sound policy framework for offshore wind procurement.
The coalition’s CES comment builds on this week’s forum and argues that the final CES should ensure alignment of the state’s energy strategies with its mandated climate goals, while also envisioning a clean energy future that prioritizes local economic development and job creation.
Wednesday’s forum featured a panel discussion with labor leaders from Rhode Island and New York. Construction of the region’s first offshore wind farm off the coast of Block Island employed more than 300 union workers, including some from Connecticut. Advocacy by New York’s labor movement was critical in securing Governor Cuomo’s January 2017 executive order addressing the procurement of offshore wind energy.
For more information on Connecticut’s offshore wind opportunity and steps for state policy makers, please see Acadia Center’s analysis.
NEW YORK — The Public Service Commission (PSC) issued an important Implementation Order on September 14, 2017, in the Value of Distributed Energy Resources (VDER) proceeding (Case 15-E-0751). Unfortunately, this order will impede the advancement of solar energy in New York and impose unnecessary barriers on the ability of consumers, businesses and communities to benefit from this clean energy resource. The structure laid out by the PSC in March of 2017 promised to reform and update New York’s approach to valuing solar energy and expanding consumer solar markets. The Order undermines the new VDER net metering structure because it undervalues distributed resources on the basis of unvetted utility studies that minimize solar’s economic value. In doing so, the Commission’s Order conflicts with the distributed energy future envisioned by New York’s historic and ambitious Reforming the Energy Vision (REV) future.
“The promise of a modern energy system that allows clean energy to flourish depends upon a fair determination of the economic value of solar and other clean energy resources,” said Daniel Sosland, president of Acadia Center, which has provided detailed comments on solar values in the PSC case. “Defining solar power’s economic future solely on information provided by electric utilities, who want to tilt the playing field towards investments that benefit the utility and its shareholders, is not a formula for short-term or long-term success.”
Mark LeBel, Associate Director of Acadia Center’s Grid Modernization Initiative, said, “The Commission has made a major mistake by approving unvetted marginal cost of service studies from Central Hudson, NYSEG and RGE. These studies all improperly limited the potential values provided by distributed energy resources. In addition, Central Hudson used a new and untested methodology that has never been put forward before in an adjudicated proceeding, and the Commission failed to address several detailed critiques brought forward by Acadia Center and other parties.”
Cullen Howe, Acadia Center’s New York Director, noted, “Acadia Center supports the overall vision that has been laid out by the Commission and the Cuomo Administration over the last several years. However, implementation of this vision cannot ignore the details and the practical realities of how to animate markets for energy efficiency and clean energy.”
BOSTON — Prices increased in the first Regional Greenhouse Gas Initiative (RGGI) auction since the participating states proposed a set of changes to the program. This is an initial indication that the market expects the program to be stronger in the future. All 14,371,585 available allowances were sold at a clearing price of $4.35, generating $62,516,395 in revenue for reinvestment. This brings the program’s total revenue to $2.78 billion—most of which has been used to fund energy efficiency and other consumer benefit programs. The Auction 37 clearing price is 72% higher than the previous auction and 4% lower than the clearing price from one year ago. This marks an end to the steady decline in auction clearing prices that began in early 2016.
The key changes announced by the states include:
Reducing the emissions cap by 30% from 2020 to 2030;
Conducting a full adjustment for banked allowances;
Strengthening the existing Cost Containment Reserve; and
Establishing an Emissions Containment Reserve
“We applaud the RGGI states for working together to improve the program, and the Auction 37 results show that these changes should make RGGI stronger,” said Acadia Center President Daniel Sosland. “After nearly two years of negotiations, the states have put RGGI on a course for long-term success.”
“Proposed policy changes have driven prices upward in this auction, but implementing RGGI reforms is the only way to ensure that prices won’t dive again,” said Jordan Stutt, Policy Analyst with Acadia Center. “Emissions continue to fall rapidly—each of the first two quarters in 2017 resulted in record low quarterly emissions—and even the new cap may not decline quickly enough to keep up with decarbonization in the electric sector. Fortunately, the new addition of an Emissions Containment Reserve should help the states reduce emissions further, at low costs to consumers.”
“The increase in allowance prices is a testament to the leadership of the RGGI states,” said Peter Shattuck, Director of Acadia Center’s Clean Energy Initiative. “By following through on proposed reforms, the nine RGGI states can demonstrate the power of bipartisan action to address climate change.”
Information on RGGI’s performance to date can be found in Acadia Center’s latest RGGI Status Report:
The Regional Greenhouse Gas Initiative (RGGI) is the first mandatory, market-based effort in the United States to reduce greenhouse gas emissions. Nine northeastern and mid-Atlantic states reduce CO2 emissions by setting an overall limit on emissions “allowances,” which permit power plants to dispose of CO2 in the atmosphere. States sell allowances through auctions and invest proceeds in consumer benefit programs: energy efficiency, renewable energy, and other programs.