The Regional Greenhouse Gas Initiative (RGGI) is a “cooperative, market-based effort to cap and reduce CO2 emissions from the power sector.” On a quarterly basis auctions are held that provide revenues that ostensibly are supposed to be used to fund initiatives to reduce emissions. Each of the member states gets its share of the auction revenues and decides what to do with the money. This post describes this year’s New York stakeholder process associated with planning for proceed investments. There also is an opportunity for anyone who wants to experience first hand New York’s Climate Act transition planning process to join a webinar on Wednesday 12/20/23.
I have been involved in the RGGI program process since its inception. One of my retirement hobbies is to blog about the details of the RGGI program because very few seem to want to provide any criticisms of the program. The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.
Background
RGGI is a market-based program to reduce greenhouse gas emissions. According to RGGI:
The Regional Greenhouse Gas Initiative (RGGI) is a cooperative effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, and Virginia to cap and reduce power sector CO2 emissions.
RGGI is composed of individual CO2 Budget Trading Programs in each participating state. Through independent regulations, based on the RGGI Model Rule, each state’s CO2 Budget Trading Program limits emissions of CO2 from electric power plants, issues CO2 allowances and establishes participation in regional CO2 allowance auctions.
More background information on cap-and-trade pollution control programs and RGGI is available from the Environmental Protection Agency and my RGGI posts page. Proponents of these programs consider them silver bullet solutions. For the record, I agree with Danny Cullenward and David Victor’s book Making Climate Policy Work that the politics of creating and maintaining market-based policies for Greenhouse Gas (GHG) emissions “render them ineffective nearly everywhere they have been applied”. RGGI raises money but accomplishes little else.
New York RGGI Operating Plan
RGGI has successfully raised money. Since the inception of RGGI there have been 62 quarterly auctions. Allowances sold for $14.88 and a total of $411,521,280 was raised. The total cumulative proceeds for all auctions is $7,160,215,872.41. According to the draft amendment to the operating plan New York’s share through fiscal year 22-23 has been a little over $2 billion and the annual proceeds invested by NYSERDA are on the order of $265 million.
The RGGI revenues are invested by the New York State Energy Research & Development Authority (NYSEERDA). NYSERDA designed and implemented a process to develop and annually update an Operating Plan which summarizes and describes the initiatives to be supported by RGGI auction proceeds. The operating plan amendments are submitted to the NYSERDA Board of Directors for approval after a stakeholder process that “engages stakeholders representing the environmental community, the electric generation community, consumer benefit organizations and interested members of the general public to assist with the development of an annual amendment to the Operating Plan.”
This article explains why I believe that NYSERDA does not take the shareholder engagement obligation seriously. From what I see it is a formality and there is no real interest in dealing with anything inconsistent with their preconceived narrative and investment plans.
NYSERDA 2024 RGGI Operating Plan Amendment
The timeline for this year’s public stakeholder process demonstrates that NYSERDA illustrates my concern:
- On 11/27/23 NYSERDA sent an email announcing the annual New York State Regional Greenhouse Gas Initiative (RGGI) Operating Plan Advisory Stakeholder meeting will take place on Friday, December 8, 2023.
- Sometime before the meeting the NYSERDA RGGI Meeting and Planning Documents website was updated with a copy of the draft 2023 Operating Plan Amendment and instructions for stakeholder remote access. The noted deadline for comments was 12/28/23.
- On 12/8/23
- I tried to join the meeting but failed to get in because no password was provided.
- I wrote to the email address used for commenting on the amendment explaining that I was not able to join the meeting.
- I received the following response: “I’m sorry to hear that you had trouble accessing the webinar. We’ll have the recording posted to our website shortly for your reference.”
- On 12/14/23 NYSERDA announced a public session on 12/20/to answer questions about the DRAFT 2024 RGGI Operating Plan Amendment or information presented during the past meeting. The following information was posted the same day.
I read this to mean that I was not the only one who could not join the webinar.
- 12/20/23 Opportunity for Public Discussion of DRAFT 2024 RGGI Operating Plan Amendment webinar
- 12/29/23 Written comments due
This year’s stakeholder process actively discourages public engagement The expectation that meaningful comments could be prepared two weeks after the posting of the video of the meeting and ten days after the chance to ask questions with the Christmas holiday in between is not realistic. In fact, it seems to be a deliberate attempt to squelch input.
RGGI Operating Plan Advisory Stakeholder Meeting
The meeting is supposed to be part of the stakeholder process that “engages stakeholders representing the environmental community, the electric generation community, consumer benefit organizations and interested members of the general public to assist with the development of an annual amendment to the Operating Plan.”
The webinar recording of the meeting supports my concern that engagement is not a real concern. In the first place, the meeting consisted of agency staff reading scripted spiels. The introductions described the narrative and little else. NYSERDA staff descriptions of the projects recited information in the operating plan amendment. There was no indication of an overall strategy for the investments.
The recording lasts 49 minutes and it is clear that no one associated with the meeting figured out that no members from the public were on the call. At 45:50 of the video the host announced the opportunity for public comment from anyone who’s visiting and attending in the room as well as comments from anyone who might be participating remotely. No one attended the meeting in person. The host said “No questions seem to have come in from the webinar. After 30 seconds are so they moved on.
Meanwhile I was trying to get in, repeatedly having no success. I also tried to contact someone from NYSERDA but was not able to get a response until after the meeting had ended.
Six days after the meeting the announcement that another meeting would be held came out:
NYSERDA is pleased to announce a public session for discussion and questions regarding the DRAFT 2024 RGGI Operating Plan Amendment. This session is a complement to the first information session that NYSERDA hosted on Friday December 8, 2023. The recording of that session is available on NYSERDA’s RGGI webpage.
NYSERDA staff will convene for discussion on Wednesday December 20, 2023 at 10:00 a.m. ET to answer questions about the DRAFT 2024 RGGI Operating Plan Amendment or information presented during the past meeting. Anyone interested in participating in this remote question and answer session should review the presentation recording ahead of time, and prepare questions for NYSERDA regarding the draft Amendment. Pre-registration is not required.
This time the webinar login instructions included a password. Saying that this meeting is a “complement to the first session” ignores the reality that no one could join the first session. I wonder how many other people tried and failed to get on the call. Just so they can justify the effort to set up the complementary meeting I submitted questions before the meeting. There was enough detail in the questions that I wanted them to be able to respond to the questions at the meeting instead of deferring them to another time.
Response
I reviewed the presentation recording, studied the transcript of the meeting, compared the meeting slide presentation to the draft amendment, and checked my draft set of comments on the amendment to prepare questions for NYSERDA that I submitted the day before the meeting.
My questions were in three categories: specific concerns with the operating plan amendment, questions on the presentations describing the amendment, and over-arching questions for discussion at the public session. The specific concerns questions are not of general interest so I will not describe them.
My questions related to the presentation including several clarifications and suggestions, but also a general interest question:
Electric Vehicles/Charge NY is slated to receive the most RGGI auction proceeds of any program and is one of the programs that is tagged to receive excess funds if the allowance proceeds are higher than expected. RGGI is a power sector control program but in the near-term electric vehicles will increase power sector emissions. Has NYSERDA accounted for that potential increase in emissions due to the increased electrification due to increased EV penetration? RGGI auction costs increase the price of electricity to everyone but supporting electric vehicles only benefits those who can afford them. How is this justified?
The over-arching questions related to the “cooperative, market-based effort “goal described by RGGI to cap and reduce CO2 emissions from the power sector. I do not think that operating plan places sufficient emphasis on the need to support emission reductions. I submitted three related questions:
During his overview presentation at the beginning of the Operating Plan Advisory Stakeholder Meeting, Jonathan Binder said “First, it resulted in real carbon dioxide emission reductions. In fact, since 2005, we’ve seen emissions from power plants subject to the program go down by around sixty percent region wide.” In the comments that I submitted last year I argued that the primary reason emissions went down so much was because of fuel switching from coal and residual oil to natural gas. In the comments I intend to submit I show that the investments of RGGI auction proceeds only were responsible for 16% of the observed reductions. Are DEC and NYSERDA claiming that all the observed reductions are due to RGGI? How much of the observed reduction does NYSERDA claim for RGGI auction proceed investments and why?
This matters because the RGGI-affected sources in New York have limited options for future reductions. There are no fuel-switching options left and there are no cost-effective add-on controls available. RGGI is a trading program and if there are allowances available from outside New York, in-state sources can purchase allowances but that does not necessarily lead to in-state emissions reductions. If you plan to limit trading in areas such as disadvantaged communities under New York Cap-and-Invest, then this option would not be available. The only guaranteed remaining option is to reduce operating time. I think it is incumbent upon the state to incentivize zero-emissions generation and reduce load so that NY RGGI sources can reduce operations and not jeopardize system reliability. Has NYSERDA estimated how much additional zero-emissions generation and load reduction is necessary to reduce New York RGGI emissions consistent with the allowance reduction trajectory? If so, where do we stand?
In my comments I focus on the allocation of investments in the operating plan amendment. I reviewed the program allocations and allocated program investments into six categories. The first three categories cover programs that directly, indirectly, or could potentially decrease RGGI-affected source emissions. Those programs only total 33% of the investments. I also included a category for programs that will add load that could potentially increase RGGI source emissions which totals 24% of the investments. Programs that do not affect emissions are funded with 35% of the proceeds and administrative costs total another 8%. Given the necessity of state investments in zero-emissions resources and load reduction these allocations are troubling. When the investment allocations were determined was the necessity t to invest in programs that could decrease RGGI-affected source emissions necessary to meet the RGGI allowance trajectory considered?
There were two other general questions:
While you mention costs, the operating plan includes years when the cap and invest program will impact allowance prices and the cost of electricity in the state. How is that change reflected in the plan?
Finally, the Operating Plan Amendment and the presentations did not include a description of the relative effectiveness of the investments to the emission reductions observed or expected. Given the enormity of the transition challenge to reach zero-emissions by 2040 for the power sector affected by RGGI I believe that priorities may have to be established to reach that target. Why isn’t the dollar per ton reduced information provided? Was this factor considered at all when funds were allocated?
Discussion
I decided to publish this before the meeting so that people who follow my blog and get updates when articles are posted could have the opportunity to join the meeting and participate. Anyone who wants to experience first hand New York’s Climate Act transition planning process can do so by following these instructions:
Opportunity for Public Discussion of Draft 2024 RGGI Operating Plan Amendment
Date: Wednesday, December 20, 2023
Time: 10:00 a.m. ET
Webinar number: 2532 757 8731
Webinar password: energy1
(3637491 from phones and video systems)
Join by phone: +1-646-992-2010 United States Toll
Access code: 2532 757 8731
Stay tuned. I will follow up on this post after the call.
Pragmatic Environmentalist of New York 