Regional Greenhouse Gas Initiative: First auction results & the future New England Restructuring Roundtable DEP Commissioner Laurie Burt December 5, 2008

Patchwork Approach? No, Beautiful Quilt.

RGGI Basics First mandatory cap-and-trade program for CO2 10 States: MA, RI, NJ, NH, VT, ME, NY, CT, MD, DE Program covers power generators > 25 MW Current cap = 188 million tons 10% reduction in 2009 CO2 levels by 2019 Auction nearly 100% of allowances First compliance period begins Jan 1, 2009

RGGI Initial Goals Stabilize GHG emissions Create a market for carbon Demonstrate a state-led regional program can work Professional, predictable auction model Aggressive investment in energy efficiency and renewables

First Auction: RGGI on the Move September 25, 2008 12.5 million allowances auctioned 59 separate entities submitted bids, 44 entities purchased allowances (80 percent sold to compliance entities) Demand outpaced supply 4:1 $1.86 Reserve Price $3.07 Clearing Price $38.5 million total proceeds ($13.5 million to MA) Market Monitor, Potomac Economics: “Auction raised no material concerns…”

Second Auction: December 17, 2008 Any Changes? All 10 RGGI states plan to participate 31.5 million allowances Clearing price and # of allowances sold released w/in 48 hours of auction close. Post-settlement report (dispersion of bids, type of bidder) released Jan 6 Auction schedule at: http://rggi.org/docs/Auction_Schedule_Oct_13_2008.pdf

Where Will the Money Go? Energy Efficiency & Renewable Energy: Massachusetts, Maryland, New Hampshire, New Jersey, New York Consumer-Focused Programs (to reduce long-term energy demand and costs): Connecticut, Delaware, Maine, Rhode Island, Vermont

RGGI funds in Massachusetts are already being deployed 80 percent to energy efficiency: $6M: Fund 100 percent of electric utility companies proposed winter 2008 efficiency program increases ($3M from each auction) $3M: Help cities and towns implement energy efficiency $4M: Help low-income households be more energy efficient through state’s HEARTWAP ($2M from each auction) $5M: Kick-start Green Communities Act

What’s Next for RGGI? Offsets Future areas of collaboration: Low carbon fuel standard (LCFS) CA LEV program (8/10 RGGI states have adopted) GHG reporting 10 states require GHG reporting: CA, CT, MA, ME, NV, NJ, NM, OR, WA MA Global Warming Solutions Act requires GHG reporting >5,000 tons/year in CO2e, including commercial/industrial Anticipated RGGI would expand to other sectors

What’s Next for RGGI? RGGI’s relationship to WCI and Midwest Greenhouse Gas Accord What about Florida?

Federal Program RGGI designed as glide path for federal action RGGI has brought energy/environmental agencies together in unprecedented ways. We will insist: Strong state-federal partnership Credit to states who have implemented GHG policy Support at least at the RGGI level State role: monitoring, reporting, permitting, energy efficiency, siting & building renewables