1 Energy Conservation Board Meeting Tuesday April 15, 2008

2 Today’s Agenda Introductions RGGI background info from DEP Board composition & responsibilities Introduction to public board law Chair & vice chair selection Discuss future tasks Schedule next meeting

3 An Introduction to the Regional Greenhouse Gas Initiative (RGGI) Jim Brooks Maine DEP Bureau of Air Quality April 15, 2008

4 Outline Climate Change What is RGGI? –Regional CO 2 Emission Cap –Jurisdictional CO 2 Emission Caps RGGI Goals and Effects RGGI Source Requirements Regional Allowance Auctions

5 IPCC “Climate Change 2007” Projections: – °F ( °C) temperature increase in next century – inch sea level rise in next century –23-foot sea level rise over several centuries –Sea level will continue to rise for centuries even if ghg concentrations are stabilized

6 IPCC “Climate Change 2007” Projections: –Sea ice to shrink in Arctic and Antarctic –Heat waves, heavy precipitation very likely to become more frequent –Hurricanes likely to become more intense

7 Increasing Temperatures From: NASA Goddard Institute for Space Studies

8 Climate Change Impacts in Maine At risk: –Land –Resources –Timber industry –Forests –Plants –Wildlife –Human health

9 Sea Level Rise in Maine Portland Pine Point, Scarborough

10 RGGI: A regional CO 2 cap and trade program Effective % reduction CO 2 from Business As Usual expected Covers Electric Generators Fossil Fuel-fired 25 MW or greater >10% annual gross sales to grid Purpose Reduce Greenhouse gases Promote energy efficiency & low carbon resources Establish a carbon price Encourage innovative technologies Establish a national model TOTAL REGION EMISSIONS CAP: 188,076,976 Tons 5,948,902 8,620,460 1,225,830 64,310,805 26,660,204 2,659,239 10,659,036 22,892,730 7,559,787 37,503,983

11 Maine RGGI Sources Rumford Power Casco Bay Energy Veazie Verso Paper Androscoggin Verso Paper Bucksport FPL Wyman Station Calpine Westbrook

12 Maine CO2 Emission by Sector (Based on Maine Climate Action Report)

13 Emission Reductions Total RGGI CO 2 allocation:188,076,976 Total Projected CO 2 reductions: 65 million tons Maine allocation: 5,948,902 Maine Projected CO 2 reductions: 2.1 million tons Note: Projected CO 2 reduction based on 10% reduction goal plus 25% reduction from offsetting Business As Usual growth

14 RGGI Goals and Effects Start region on a path to lowering emissions of CO 2 Reduce dependence on foreign sources of energy Promote cleaner forms of electric generation Achieve lowest cost reductions of CO 2 emissions Encourage new investment in alternative energy and energy efficiency projects Stimulate the development of new technologies Model for national program Establishes a program review for 2012

15 RGGI Goals and Effects: Cost Without energy efficiency, energy costs in the RGGI region are expected to increase.8% to 2.75% Without energy efficiency mitigation, projected Household Bill will increase $3 - $22 annually Increases in Energy Efficiency will mitigate cost and provide a net dollar benefit to energy consumers. PUC and energy experts believe energy efficiency investment can eliminate price impacts.

16 Development of ME RGGI Program Authorizing Legislation –LD1851 –Signed June, 2007 Rulemaking –Chapter 156: CO2 Budget Trading Program (December 2007) –Chapter 157: CO2 Budget Trading Program Waiver and Suspension (December 2007) –Chapter 158 : Auction Rules (pending)

17 Development of ME RGGI Program Energy Conservation Board –4 members appointed by the Governor –3 governmental members –2 staffers at PUC

18 Energy Conservation Board Mission “To assist the commission and the trustees of the Energy and Carbon Savings Trust in the development, coordination and integration of planning for the State’s energy conservation efforts and to provide advice and counsel to the commission and the Energy Carbon Savings Trust on energy conservation and carbon dioxide reduction matters.”

19 $ Energy Carbon & Savings Trust $ Trustees Triennial Conservation Plan Energy Conservation Board Efficiency Maine $ Auction $ $10 – $25 million Where does the ECB fit in? Others

20 Why Focus On Energy Conservation and Efficiency?

21 Board Composition Voting Members Representative of commercial electric consumers Representative of industrial electric consumers Representative of Office of Public Advocate Representative with environmental issues and climate change knowledge Representative of small businesses The Commissioner of DEP or designee Director of Office of Energy Independence or designee

22 Board Composition 3 year terms –2 consecutive year limit Can meet up to six times per year May have three non-voting members –Additionally, the Chair of the PUC and Energy & Carbon Savings Trustees serve as non- voting members Need 5 affirmative votes for any action

23 $ Energy Carbon & Savings Trust $ Trustees Triennial Conservation Plan Energy Conservation Board Efficiency Maine $ Auction $ $10 – $25 million Where does the ECB fit in? Others

24 Triennial Energy Conservation Plan For all programs on or after July 1, 2010 The Energy Conservation Board –Provides input to the trustees –Reviews efficiency and conservation plan budget allocations –General guidance on program implementation

25 Budget Allocations for the Trust During 2009, 2010 & 2011 –Not less than 85% of trust fund to reduce electricity consumption –Not more than 15% for fossil fuel conservation measures –Must fund conservation measures with the highest benefit-to-cost ratio

26 Being Informed Bring expert speakers to board meetings The trust can fund consultants Previous studies and plans –Triennial reviews of the Efficiency Maine Program (2006) –Maine’s Energy Efficiency Program Plan (2004 – 2008) –PUC staff report on the potential for energy efficiency in Maine (2003).

27 Efficiency Maine A program of the Maine Public Utilities Commission Established in 2002 Programs –Business –Residential –Low income –Schools Results ( ) –2,103,430 MWh over life time of improvements ( ) –$187 million lifetime economic benefits from programs –Prevented 1 million metric tons of CO2 emissions

28 General Guidance for Programs through Efficiency Maine Increase consumer awareness of cost-effective options for conserving energy Create more favorable market conditions for the increased use of efficient products & services Promote sustainable economic development & reduced environmental damage Reduce the price of electricity over time for all consumers by reducing peak demand Reduce total energy costs for electricity consumers by increasing efficiency 20% funds to programs for low-income residents 20% for small business consumers Remaining funds as accessible as possible to all groups

29 The Energy Carbon & Savings Trust 3 trustees –Will be appointed this summer 3 year terms, limit of 2 consecutive years May attend Energy Conservation Board meetings as non-voting members

Timeline July Carbon trust fund established & trustees appointed September First regional auction October Trust starts

31 Next Steps Questions & open discussion Introduction to public board law Select Chair & Vice Chair Identify tasks/agenda for next meeting Schedule next meeting

32 Next Step Considerations What do you want to know in order to guide the Trust? –More about Efficiency Maine –RGGI efficiency efforts in other states –Carbon offset projects –Interim plan (Triennial plan does not take effect until July 2010) –Define process to provide input to Trust –Public relations, outreach, transparency Website –Work plan sub-committee