N.H. House ends cap-and-trade program

Thursday February 24, 2011

CONCORD, N.H. -- The New Hampshire House voted Wednesday to end the state’s participation in a cap-and-trade program aimed at reducing carbon emissions at the end of the year.

The House voted 246-104 for a bill that would repeal the law under which the state joined the Regional Greenhouse Gas Initiative.

New Hampshire is one of 10 Northeastern states participating in a cap-and-trade program for carbon dioxide. Under the program, generators must reduce pollution or bid at auction for allowances giving them the right to produce certain amounts of carbon dioxide.

Proceeds from the auction are used for energy efficiency programs. Critics complain electric users are funding efficiency programs that don’t directly benefit them.

But Gov. John Lynch, who supports the initiative, says repealing the law would cost ratepayers up to $6 million a year while the state forfeits $12 million a year in funding.

New Hampshire belongs to a regional power pool and that affects the electric rates paid by pool members. If New Hampshire withdraws from RGGI, New Hampshire’s rates would still reflect cap-and-trade costs included in rates by RGGI members that belong to the pool.

Under the bill, Public Service of New Hampshire, which owns three of the five power plants covered by the law, could not recoup from ratepayers costs for buying allowances to cover future emissions.

House Science, Technology and Energy Chairman James Garrity said the utility could sell the allowances on the carbon market.

Garrity, R-Atkinson, argued lawmakers adopted RGGI based on unproven science about greenhouse gases.

"Three years ago when RGGI was approved, the rallying cry was that we must join RGGI or the planet will dry up. Here we are three years later ... and the rallying cry is we can’t lose RGGI or the money will dry up," he said.

Garrity also said the current law is a stealth tax on electric users.

Last year, New Hampshire raided its fund to help pay for other state spending -- a move Lynch supported and defended by saying the overall goal of reducing energy demand was being met through a mix of state and federally funded programs.

State Rep. Beatriz Pastor, D-Lyme, rejected Garrity’s position as unwise. If one accepts the science is uncertain, the risks of doing nothing are too great, she said. By the time the question is answered, the damage to the environment will be irreversible, she said.

"Noah got intelligence a natural disaster was about to occur. He could have looked out the window and said, ‘It doesn’t look like it is going to rain,’" she said.

The House Finance Committee next reviews the bill, but the two-to-one vote margin reflects November’s Republican takeover of the House since Democrats were in charge and adopted New Hampshire’s RGGI law in 2008.

The bill calls for any money left in the fund when New Hampshire withdraws from RGGI to be used for energy efficiency.


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