RGGI Helps You Keep More $$$ In Your Pockets

Amazing things happen when states support the expansion of energy efficiency programs: electricity bills decline, fossil fuel pollution decreases, and the public at-large benefits. These were among the many conclusions of a highly anticipated report released last week by Analysis Group. The report studied the recorded costs and benefits of the Regional Greenhouse Gas Initiative (RGGI) from 2012 through 2014 to the nine northeast states that voluntarily participate.
RGGI is a cooperative effort that caps and reduces carbon emissions from power plants. Power plants in participating states (from Maine to Maryland) purchase allowances for every ton of carbon pollution that they emit. RGGI states agree on how many pollution allowances to offer for sale each year, setting a declining cap, and the revenue from the sale of allowances is returned to individual states. (For a background explanation of RGGI, see this CCAN fact-sheet.)
In short, the report states that directing resources to energy efficiency programs “stands out as the most economically beneficial use of RGGI dollars.”
These findings are important, particularly due to the report’s timing. In a matter of weeks the Environmental Protection Agency is expected to finalize the rules of the Clean Power Plan which will require Virginia to cut its carbon pollution by over one-third within the next fifteen years. RGGI is a solution to the Clean Power Plan and could provide Virginians with numerous other benefits as well.

Analysis Group Report: In Detail

One very important detail: This new Analysis Group report focuses solely on the economic costs and benefits of RGGI. The report acknowledges that RGGI was originally formed for the expressed purpose of reducing fossil fuel pollution to combat climate change. RGGI certainly has benefits to the environment, public health, and other areas that the researchers don’t consider as a part of the scope of this study. Analysis Group measured only the impacts of RGGI on the economy in the nine participating states.

On Energy Efficiency

RGGI states’ successful usage of energy efficiency investments paved the way towards $460 million in total electricity bill reductions for consumers in the past three years, while lowering carbon pollution faster than these states expected. The report concedes that there are many other ways states benefited by participating in RGGI, which includes both direct and indirect costs throughout the region. On the whole, Analysis Group found that the enormous benefits to consumers via energy efficiency resources created through RGGI dramatically outweighed the costs of participation in the program.
Specifically, the report found the following:

“RGGI-funded expenditures on energy efficiency depress regional electrical demand, power prices, and consumer payments for electricity. This benefits all consumers through downward pressure on wholesale prices, even as it particularly benefits those consumers that actually take advantage of such programs, implement energy efficiency measures, and lower both their overall energy use and monthly bills. These savings stay in the pockets of electricity users directly.”

In short, RGGI-supported energy efficiency dollars save consumers money. According to the latest data from the U.S. Energy Information Administration (EIA), the average residential customer’s electricity bills in the nine RGGI states is $108.43. That figure is nearly $17 lower than the average monthly residential electricity bill Virginians pay of $125.36. The national average is $111.08.
Why do customers in RGGI states pay lower electricity bills than customers in Virginia? The answer is simple: customers in RGGI states use a lot less electricity. Again referencing the latest EIA data, the average residential user’s energy consumption in RGGI states is 702 kilowatt hours (kWh) per month, far below Virginia’s average consumption in the residential sector of 1,156 kWh monthly. The national average is 909 kWh monthly.
Statewide energy efficiency programs like lighting and appliance upgrades, home insulation inspections and improvements, and general consumer efficiency education all help customers consume less electricity, which ultimately reduces customers’ bills and decreases fossil fuel generation and pollution. Customer bills in RGGI states are lower than the national average even though electricity rates in RGGI states are indeed higher than the national average. The important factor is electricity consumption, and it’s a fact that RGGI leads to less energy consumption and consumers in RGGI states use less electricity than Virginians.
Critics of RGGI and the Clean Power Plan argue that they’re too costly. However, independent studies and documented government data strongly suggest the opposite. If done correctly, Virginia can craft its plan of compliance in a way that is extremely cost-effective and actually lowers bills for consumers. RGGI is the smartest path forward for Virginia.

Other RGGI Benefits

Even though Analysis Group concludes that energy efficiency provided the most “bang for your buck” and produced the most direct economic value to consumers, the report points out that states have been increasingly more creative in the use of RGGI dollars to advance various state priorities.

“The states’ use of allowance proceeds not only provide economic benefits, but also has helped them meet a wide variety of social, fiscal and environmental policy goals, such as addressing state and municipal budget challenges, assisting low-income customers, achieving advanced energy policy goals, and restoring wetlands, among other things.”

Sea level rise from climate change is threatening our coast. Electricity bills in Virginia are among the nation’s highest. The EPA is requiring states to reduce their carbon footprint for the public’s health and welfare. It’s time for bold, yet practical solutions in Virginia to meet these challenges.
We can begin solving all of these problems by joining RGGI and wisely reinvesting our allowance resources in adaptation, energy efficiency, and other statewide priorities. The evidence is here. The program works. Now we need the wisdom and resolve to join our neighbors by becoming the 10th state participating in RGGI.

Weekly Climate Insider: Chinese Smog, Powershift, and Fracking in Virginia

Bad news from Huffington Post: The Canadian Arctic has reached the highest temperatures in at least 44,000 years. Gifford Miller, a researcher at the University of Colorado, Boulder, says, “This study really says the warming we are seeing is outside any kind of known natural variability, and it has to be due to increased greenhouse gases in the atmosphere.” This study reaffirms that global temperatures are rising at an unprecedented rate: we’ve seen a warming trend for the past century, but the process has been accelerating significantly since the 1970s and has skyrocketed in the last twenty years. Miller didn’t end on a happy note. “We expect all of the ice caps to eventually disappear, even if there is no additional warming.
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A tale of 3 cities and 2 very bad bills

Two bills before the General Assembly right now, SB 128 (McDougle) and HB 1300 (Kilgore), would limit the Air Board’s authority to regulate polluters in non-attainment areas. When a region fails to meet the National Ambient Air Quality Standards, set by the EPA to protect public health, the EPA will designate that area as a non-attainment region. Currently only Northern Virginia is listed as a non-attainment region in Virginia. However, Richmond and Hampton Roads are expected to be designated as non-attainment areas by March 2011.

Living in a non-attainment area is bad for your health. Smog and soot, measures used to determine ambient air quality, are linked to So2 and NOx which are in turn connected to decreased lung function, aggravated asthma, chronic bronchitis, irregular heartbeat, heart attacks, premature death. According to the American Lung Association, “Ozone smog threatens the health of infants, children, seniors and people with . . . lung disease. . . . Even healthy young adults and people who exercise or work outdoors can suffer from high levels of ozone pollution.”

Not only is a non-attainment area a major health issue but it is an economic development issue as well. Regions of non-attainment encounter significant federal restrictions. Businesses looking to develop in Virginia do not want to locate in Non-Attainment areas because of these increased restrictions. Getting out of non-attainment is critical for public health and economic development.

Now, back to the bills. SB 128 and HB 1300 would limit the Air Board in how it regulates a non-attainment area. Currently, the Air Board can prohibit major polluters in non-attainment areas from purchasing credits for excess pollution, thus forcing them to actually clean up their acts. With the passage of these 2 bills, the Air Board would no longer be able to prohibit this trading practice. What this means is that major polluters can continue to pollute in non-attainment areas while small businesses will continue to be heavily regulated, making it that much harder for areas to clean up their air.

SB 128 was amended to exclude existing non-attainment areas (NoVA) from this new regulatory change. Delegate Kilgore, the patron of HB 1300, promised he would make the same amendment, but this morning as he presented the bill before committee, he kept it as is. The bill passed out of committee without the NoVA carve out. If both bills pass they will be placed in conference committee to reconcile the differences. Either way, this isn’t good news for Richmond or Hampton Roads. Please call your state senator today and ask them to vote NO on HB 1300 when it comes to the floor.