State to Get Millions for Climate Change Strategies After Rejoining Regional Energy Initiative

Tom Johnson | March 16, 2020 | Energy & Environment
Former Gov. Chris Christie pulled state out of RGGI in 2012, which has cost New Jersey about $300 million in clean energy funding
Coal-burning power plantCredit: peggydavis66 via Creative Commons (CC BY-SA 2.0)
RGGI is a cap-and-trade program that places a tax on carbon emissions from power plants, which is passed on to utility customers.

For the first time in almost a decade, New Jersey last week participated in a multistate auction aimed at curbing greenhouse gas emissions from power plants in 10 states in the Northeast and Mid-Atlantic region.

The Regional Greenhouse Gas Initiative (RGGI) auction held last Wednesday generated $91.6 million for the states to reinvest in strategic programs addressing energy efficiency, renewable energy, direct bill assistance and reducing carbon pollution. It is unclear yet what New Jersey’s proceeds will be.

For New Jersey, it marks a milestone in rejoining the initiative. An original member of RGGI, former Gov. Chris Christie pulled the state out in 2012, calling it a tax on utility customers. Over the years, the decision has cost the state about $300 million in clean energy funding that would have been funneled to New Jersey.

The initiative is a cap-and-trade program placing a tax on carbon emissions from power plants, which is passed on to utility customers. The state Department of Environmental Protection projects the surcharge will cost the average homeowner $9 more a year on their electricity bill. The cost will be much higher for large energy users.

One of Gov. Phil Murphy’s top campaign pledges was for New Jersey to rejoin RGGI. The governor has repeatedly pushed the state to adopt more aggressive policies to fight climate change.

Reaching a key milestone

“The auction is a key milestone in New Jersey’s commitment to fight climate change,‘’ said DEP Commissioner Catherine McCabe. “RGGI participation will help our state achieve its climate change goals, bolstering clean energy and benefitting communities.’’

New Jersey finalized regulations last year for rejoining RGGI, once viewed as a model for establishing a national program to curb carbon pollution from power plants. RGGI’s auction Wednesday marks its 47th in selling carbon dioxide allowances.

“With ten states participating in Auction 47, RGGI marks the new decade with an important achievement,’’ said Marty Suuberg, commissioner of the Massachusetts Department of Environmental Protection and chair of RGGI. “The ten RGGI states look forward to strengthening the regional impact and serving as a model for climate policy to other states and jurisdictions.’’

Pennsylvania, Virginia could be essential

Both Pennsylvania and Virginia also have expressed interest in joining RGGI, an important step because their exclusion from the initiative could lead to a scenario where power plants in those jurisdictions — subject to less stringent pollution controls — more than offset pollution reductions achieved by the RGGI states.

Nevertheless, the RGGI model is currently being pushed by the Transportation and Climate Initiative, which aims to put an RGGI-like cap on fossil fuel emissions from automobiles in the Mid-Atlantic and Northeast states. The transportation sector is now the largest single source of greenhouse gas emissions, accounting for roughly 40% of carbon pollution in the region.

But none of the 12 states that are part of the alliance, nor Washington, D.C., have committed to the plan, which is projected to boost prices at the pump by as much as 5 to 17 cents per gallon.