Category: Regional Greenhouse Gas Initiative

Yesterday I described the New York State Energy Research & Development Authority (NYSERDA) stakeholder process for investing the proceeds received from the Regional Greenhouse Gas Initiative (RGGI).  Yesterday’s post explained that NYSERDA had inappropriately prevented participants from asking questions about the RGGI operating plan amendment at the Stakeholder Meeting on 12/8/23.  In order to address the requirement for stakeholder participation a webinar was held today for discussion and questions.  While NYSERDA staff said they appreciated the questions I submitted before the meeting their responses demonstrated that they really could have cared less, 

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

For background information on RGGI and the operating plan refer to yesterday’s post.

This article and yesterday’s post explain 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 Schedule

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.” 

The timeline for this year’s public stakeholder process is the first sign that the commitment to engage stakeholders to assist with the Operating Plan is a hollow gesture.  As shown in the following timeline the schedule is so tight and crosses a holiday, that it is unrealistic to expect meaningful input:

• 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. 
• On 12/8/23 NYSERDA hosted the Advisory Stakeholder meeting

• Presentation [PDF]
  Webinar Recording 
• Webinar Transcript [PDF]

• 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. 
• 12/20/23 Opportunity for Public Discussion of DRAFT 2024 RGGI Operating Plan Amendment webinar
• 12/29/23 Written comments due

Issues with the Advisory Stakeholder Meeting

I tried to join the 12/8/23 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 after the meeting: “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.”

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 was 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 or so they moved on.  It is inconceivable to me that no one on the call has access to the attendee list that showed no one was on it.  Therefore I conclude that they did not care and likely were pretty happy that they did not have to deal with trouble makers who asked questions that would mean more work or lead to uncomfortable responses.

Six days later NYSERDA announced the December 20, 2023 Opportunity for Public Discussion Webinar.  I read this to mean that I was not the only one who could not join the webinar.  I can think of two reasons for the webinar keep up the impression that they cared about stakeholder engagement or possibly there is some provision in the open meetings law that requires that the public actually have the chance to ask questions that they were required to have a meeting that allowed questions.

The  recording of the meeting supports my concern that public engagement is not a real priority.  They were clearly just going through the motions.  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 with no additional context or details.

Issues with the Opportunity for Public Discussion Webinar

In yesterday’s post I explained that I followed the directions for the webinar.   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. 

I described some of the more important questions and linked to all the questions in yesterday’s post. The 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 response to questions during the webinar further reinforces my belief that NYSERDA is only paying lip service to the public engagement commitment.  They only set aside 30 minutes to respond to questions. Near the end of the call I heard “We have to be respectful of people’s time” which translates to NYSERDA staff time and not these trouble making members of the public who forced us to have this call.

They did not get through all the questions I posed.  They took questions posed in the chat function of the webinar.  I did not get a chance to make a copy of the chat window before the webinar was shut down so I cannot provide details.  All the chat questions addressed specifics of programs.  In my opinion, the responses gave short shrift to the questions posed. 

It was not until 25 minutes in until they begrudgingly started to answer my questions.  In other words,they almost got away avoiding everything that I took the time to send to them before the meeting.  In my written questions I asked five questions related to specific concerns with the operating plan amendment, five questions about the presentations describing the amendment, and six questions addressing over-arching questions for discussion.  They answered two of the questions related to specific concerns with the operating plan amendment, none of the questions about the presentations describing the amendment, and two questions addressing over-arching questions for discussion. 

The responses to questions related to the specific concerns with the operating plan amendment are not of general interest but the responses to the others are worth noting.

The answer to the following question missed the point:

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 11% 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?

The responder claimed that the answer to this question was included in the following report: New York’s RGGI-Funded Programs Status Report – Semiannual Report through June 30, 2023.  According to Table 1. Summary of Expected Cumulative Portfolio Benefits through June 30, 2023 in that report, the cumulative annual installed Net GHG emissions savings were 1,807,679 tons of CO₂e.  In 2022 emissions were down 16,196,531 tons relative to the 2006-2008 annual average baseline.  That works out to 11%.  The Status Report does not compare the expected portfolio emission reduction against the observed reduction, so the response did not answer the question.  This is important.  The point is that the DEC and NYSERDA have never admitted that RGGI investments are only responsible for a fraction of the observed reductions.  I think that suggests that investing in more effective programs would be appropriate.   I raised that point in one of the unanswered questions:

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 to invest in programs that could decrease RGGI-affected source emissions necessary to meet the RGGI allowance trajectory considered?

They did respond to the following question:

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?

The other discussion questions were asked to see if there had been any strategic consideration of investments and expected reductions relative to the Climate Act emission targets.  The State has not had to worry about that but 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. The New York Cap-and-Invest program is considering limits on trading in areas such as disadvantaged communities, that would make this option unavailable.  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.  NYSERDA staff at the meeting ducked the question: 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? 

I believe they think they are the smartest people in the room, and I know that there is overt pressure from the Hochul Administration to support the narrative.  This combination of hubris and bias is dangerous.  They are refusing to consider comments that use observed results in the plans for future investments or anything else from outside their bubble.   Consequently, they are endangering the Climate Act targets they are supposed to be supporting.

There was one final disappointment that epitomized the meeting.  I asked if NYSERDA would publish responses to my questions and respond to comments submitted.  Long winded and evasive answer boiled down to no.  With all due respect, if I were on the NYSERDA Board and had to vote on how to spend over $250 million per year I would like to see documentation that addressed public stakeholder input.  As it is the NYSERRDA staff presentation to the Board says we considered stakeholder input but provides no documentation. 

Conclusion

In yesterday’s post I mentioned that today’s meeting would be an opportunity for my readers to experience firsthand New York’s Climate Act transition planning process.  I hoped nobody wasted their time doing so.  This meeting was embarrassing even by Albany agency standards.

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.  The response to questions today suggests that it would not matter anyway.  the refusal to provide answers to all the questions submitted seems to be a deliberate attempt to squelch input.

NYSERDA gives lip service to public stakeholder participation but the actions during this process clearly show the bottom line is they don’t care.  The public participation meeting just checked the box that there was public participation. 

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.

• Presentation [PDF]
  Webinar Recording 
• Webinar Transcript [PDF]

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

Join Webinar

Stay tuned.  I will follow up on this post after the call.

The Regional Greenhouse Gas Initiative (RGGI) is a carbon dioxide control program in the Northeastern United States.  One aspect of the program is a program review that is a “comprehensive, periodic review of their CO2 budget trading programs, to consider successes, impacts, and design elements”.   I recently posted an article describing my comments to RGGI addressing the disconnect between the results of RGGI to date relative to the expectations in the RGGI Third Program Review modeling.  This post describes other comments submitted to RGGI.

I have been involved in the RGGI program process since its inception.  I 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.  However, 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”.

Third Program Review

The RGGI participating states hosted two public meetings on September 26, 2023, to discuss updates on the Third Program Review and electricity sector analysis.  I am not going to repeat my description of the presentations here because I covered the details in my article describing my concerns and comments.

I am primarily concerned with the RGGI States Third Program Review request for comments about one program change and the plans for the trajectory of future emissions reductions.  The RGGI States recommended shifting the compliance period to annual compliance from the current three-year period.  A major concern of the program review is future allowance availability so the decarbonization timeline for the electricity sector was considered.  This is complicated because participating State timelines vary, implementation of offshore wind deployment affects decarbonization rates and grid-scale battery storage deployment, duration, and supply certainties affect the outcomes.

The RGGI States have not proposed their plans for the Third Program Review.  In order to address allowance availability, the RGGI States modeled the future electric system.  They described three key observations from the modeling results that support the idea that the RGGI allowance availability can be made more stringent.

1. Modeling shows how current state decarbonization and renewable requirements can significantly reduce emissions;
2. Federal incentives for clean energy have the potential to rapidly transform the RGGI region generation mix; and
3. Scenarios modeled to date show relatively low allowance prices compared to the ECR/CCR price triggers in the Model Rule

The comments received are available on the RGGI website.  The remainder of this article describes the comments submitted.  I find these comments interesting because they provide more information about the underlying biases of those individuals and organizations who took the time to comment than their applicability to the RGGI issues raised.

Biomass Considerations

Three comments from individuals in Vermont complained about biomass power plants and the existing provision for “eligible” biomass to be treated as having zero emissions.  I have not followed RGGI biomass issues and the potential for offsets much so I cannot provide any context. It appears that these commenters don’t like biomass facilities.

• Ashley Adams
• Bob Atchinson 
• Pike Porter

Emission Traders

Independent energy marketing and trading firm Mercuria Energy provided comments that are self-serving.  The Mercuria Energy America comments recommended the following:

• Implement the rule change as soon as possible,
• Net-zero by 2035 is the best option,
• Supply scenarios could be merged if needed,
• Revise the Emissions Containment Reserve and Cost Containment Reserve trigger prices, and
• Caps should be aligned to the existing adjusted cap.

All these recommendations have market implications that emission traders could exploit.

Supporting the Narrative

Two sets of comments generally followed the narrative provided by the RGGI States in their presentations.  The States want to tighten the allowance caps and incorporate an environmental justice component.  These comments aligned with those preferences.

Comments from Business Leaders recommended aligning the caps with necessary climate ambition, incorporating input from environmental justice communities and EJ advisory groups, air quality monitoring, and investing at least 40% of revenues in EJ communities.  The business leaders included: Autodesk, Inc; Ben & Jerry’s; Char Magaro Designs; Danone North America; DSM Firmenich North America; Franklin Energy; Good Start Packaging; Habitus Incorporated; Haverford College; Miller/Howard Investments, Inc.; New Balance; New Jersey Sustainable Business Council; New York City Office of the Comptroller; Oaktree Development; Sonen Capital; Steve Harvey Law, LLC; Studio G Architects; Sunowner Inc.; Sustainable Advisors Alliance LLC; The Green Engineer, Inc; The Stella Group, Ltd.; TripZero; Unilever United States; and Zevin Asset Management.

The Green Energy Consumer Alliance comments advocated for ambitious emission reduction targets and raised additional matters to consider in this program review requesting a presentation with sufficient time for public input on topics such as the cost containment reserve, emission containment reserve, allowance banking beyond 2035 in the zero by 35 scenario, and environmental justice. 

It is interesting to me that there are non-profit organizations who submitted comments.  The “Business Leaders” comments were “organized” by Ceres who is “transforming the economy to build a just and sustainable future.”   Ceres managed to get funding to submit comments on RGGI from companies that are only peripherally affected.  The Ceres IRS Form 990 says that they have 221 employees, a $22 million payroll, and spent $2.3 million for fundraising in 2022.  Apparently, they have a successful business model because they got 24 companies to sign the comment letter and presumably provide funding for the privilege.  On the other hand, the Green Energy Consumer Alliance has only 23 employees, a $1.3 million payroll, and only spent $60K for fundraising.  Their motivation for commenting was similar.

Supporting Advocacy

Seven organizations submitted comments under the banner Frontline Communities in the Commonwealth of Pennsylvania.  Their letter made seven recommendations:

• Establish strong guidance and an implementable policy framework encouraging states to stablish, maintain, resource, and empower Equity Advisory Boards.
• Strongly encourage states to lead and complete equity analyses.
• Outline and encourage reinvestment priorities for frontline communities
• Improve public participation practices.
• Close loopholes that permit facilities with multiple small combustion turbines to avoid reducing overall emissions.
• Expand qualifying polluters and reject false solutions.
• Eliminate offsets in order to drive real emission reductions

I am not impressed with the content of these comments.  The relevant RGGI issues are addressed last, almost as an afterthought.  Moreover, they consist mostly of buzz words and slogans.  There are loopholes foisted on unsuspecting innocents that surely have major impacts but they never document what they are.  They reject false solutions like biomass, refuse-derived fuel, and trash incineration without acknowledging that there might be co-benefits associated with those technologies.

My impression is that their primary purpose for commenting is to plead for support for their organizations.  The first four recommendations all are linked to advocacy support which I am sure they will be glad to provide.  The comments go so far as to suggest that 100% of the revenues should be invested in front-line communities.  My comments emphasized the point that future emission reductions in the RGGI states are going to have to rely on wind and solar resources displacing the affected source operations which is going to be hard enough to do without a limitation on where the auction revenues must go.

Class by Themselves Comments

Comments by the Nature Conservatory rate their own section.  This is a global charity and their IRS Form 990 says that they have a total revenue of $1.3 billion, 4,052 employees, a $441 million payroll, and spent $146 million for fundraising in 2022.   On the face of it, these comments follow the narrative espoused by CERES and Green Energy Consumer Alliance.  Closer inspection shows that there is a self-serving exception to the points made by other advocates.  The comments also show an amazing level of naivety and incompetence as shown below.

The Nature Conservatory (TNC) comments addressed the “loophole” for generators greater than 25 MW which they said should be closed by expanding to all generators 10 MW and larger and requested additional modeling of carbon capture and storage rules to better understand CCS impacts to the RGGI program and affected communities. 

The offsets that other organizations consider “false solutions” are lauded:

TNC believes that the RGGI program could better utilize potential offset projects from natural climate solutions, helping achieve net-zero emissions while better valuing our natural environment on the pathway towards a clean economy.

Turns out that “TNC has more than 20 years of experience pioneering best practices for natural climate solutions and carbon projects around the world”.  Cynics like me think they want to expand their solutions to this market too.

The following comment was provided to address the proposal to change the compliance period:

There is considerable flexibility in allowance compliance for participating entities, and we would recommend that this program review consider adjusting the compliance period language towards annual compliance. Annual compliance criteria would better account for annual fluctuations and market conditions in energy production, as well as create better stability in allowance prices and funding programs. Currently, compliance is evaluated at the end of each three-year control period by RGGI Inc through their CO2 Allowance Tracking System (COATS), with fines levied by participating states on facilities for non-compliance. RGGI states also have an interim control period compliance requirement, which requires each participating facility to hold allowances equal to 50 percent of their emissions by the end of the 2nd year of the compliance period. Such flexibility allows for secondary allowance markets to benefit from compliance requirements, but these benefits did not extend to participating states. During the RGGI September 26 public meeting, this was a topic supported by the RGGI states, and they concluded that the benefits of implementing annual compliance outweigh any loss of flexibility.

This word salad of regurgitated text from the RGGI documents is embarrassing.  The first sentence just repeats the arguments in the Topics for Consideration document.  The next sentence: “Annual compliance criteria would better account for annual fluctuations and market conditions in energy production, as well as create better stability in allowance prices and funding programs” is wrong on every count.  Carbon dioxide emissions from RGGI affected sources are directly related to how much the plants operate and weather correlates strongly with electric load and plant operation.  The three-year compliance period smooths out the annual fluctuations.  An annual compliance period cannot account for annual fluctuations which means the market conditions will be more volatile.  A market that bounces between annual deficits and surpluses is anything but stable.  The paragraph goes on to accurately describe the flexibility mechanisms in the three-year compliance period approach.  Then the author states: “Such flexibility allows for secondary allowance markets to benefit from compliance requirements, but these benefits did not extend to participating states”.  I think it is a mistake to disconnect the secondary allowance market from the market as a whole because the secondary and primary markets both have to be healthy for the RGGI auction system to work well.  The RGGI States certainly benefit from a healthy market unless the line of reasoning is that if the market is uncertain and causes higher allowance prices the RGGI States make more money.  That would indicate a failure to understand that citizens of the RGGI states will pick up the tab. 

Incredibly the comments get worse.  Under the topic of “Environmental Justice Considerations” the recommendation is to “Increase funding for emission monitoring programs to install monitors for more participating generators.”  The rationale states:

Participating generators are required to hold allowances equal to their CO2 emissions, as determined by the EPA’s Clean Air Markets Program (CAMP) monitors or a calculation of heat rate and fuel consumption. However, over two-thirds of RGGI plants do not have any active air quality monitoring sites within a 3-mile radius, and miscalculation of emissions based on available data make accurate representation of actual emissions difficult.

This line of reasoning for air quality monitoring has been advocated by naïve environmental justice advocacy organizations but I would expect that an organization that employs thousands would have a better understanding of the basics of air quality reporting and permitting.  All RGGI sources report their emissions to EPA in a system that meets the highest levels of transparency and accuracy.  There is a red herring argument that implies that because there isn’t an air quality monitor near the RGGI sources that they are getting away with disproportionate impacts.  All RGGI sources have had to repeatedly prove in their permit applications that their emissions will not contravene the National Ambient Air Quality Standards (NAAQS).  The modeling and analyses associated with those demonstrations trace back to periods when there were air quality monitoring systems around many of the facilities.  Once the ambient monitoring proved that there were no issues with the NAAQS then the ambient monitoring requirements were dropped. 

The last sentence displays a complete lack of understanding relative to emissions and air quality impacts.  The phrase “miscalculation of emissions based on available data make accurate representation of actual emissions difficult” suggests that if ambient air quality measurement were available then better estimates of actual emissions would be possible.  While it is possible to estimate emissions from air quality measurements, the methodology is loaded with uncertainty.  In order to do the calculation, you must also monitor the meteorological conditions between the source and monitoring station.  Given the variation in wind speed, wind direction, and stability those variations make this calculation approach likely to produce results laden with errors and uncertainty.  Air quality monitoring in disadvantaged communities can address local emissions issues but I am confident that issues with the air quality standards due to the RGGI sources will not be found.  Using air quality monitoring do estimate emissions from RGGI sources is an absurd proposition given that the RGGI sources directly measure emissions in the stacks themselves using equipment and standards that meet the very high standards of the EPA.

RGGI Affected Sources

There were two affected source comment letters.

Tenaska, Inc. owns and operates gas turbines in MA, PA and VA.  Their comments argued against an annual compliance period and they suggested adding an auction after the end of the year but before the compliance true-up date.  Their comments on the Electricity Sector Analysis – Budget Cap and Allowance Supply Scenarios stated:

RGGI is evaluating four budget cap/allowance supply scenarios, including two that would reach zero by 2035 and 2040. We strongly caution adoption of either of these scenarios given the strong uncertainty regarding availability of zero-carbon resources and the need for fossil-based, dispatchable resources to provide the required generation and to support certain electrification goals.

We also point out the scope of the EPA’s proposed CAA §111 rules for new and certain existing fossil fuel-fired electric generating units . The new source rule would not require emission reductions for units with annual capacity factors less than 20% and would not require 100% reductions from any new source. The existing unit proposal would cover only large, frequently operated units. The zero by 2035/2040 RGGI proposals would prohibit any of these units, new or existing, from operating after those dates. Several ISOs/RTOs expressed concern with resource adequacy regarding the CAA §111 proposal and would no doubt have serious concerns with the RGGI proposals. We recommend RGGI take a cautious approach when attempting to predict the power generation needs and resource-mix more than a decade into the future. RGGI need not be more stringent than the EPA.

The Environmental Energy Alliance of New York is an ad hoc, voluntary group of New York electric generating companies, transmission/ distribution companies and other providers of energy services that address environmental initiatives.  In the interest of full disclosure, I was the Director of the organization from 2010 to 2017 and still provide technical support as needed.  The comments from the Alliance addressed several issues.  They argued that the flexibility inherent in the three-year compliance period was needed in the future because of upcoming changes to the RGGI allowance market and pointed out that the RGGI States rationale for changing was weak.  A big concern of the New York affected sources is that changes to the allowance trajectory schedule should address the recent cancellations of substantial amounts of offshore wind.  That affects the operations of RGGI-affected sources and should be considered by the RGGI modeling evaluation.  Another component of the transition to “zero-emissions” resources is the need for a presently unavailable dispatchable emissions-free resource.  Ignoring the need for this resource before 2035 risks underestimating the capacity of wind and storage required to maintain the grid so this should also be considered in the RGGI modeling evaluation. 

Pragmatic Environmentalist Comments

I also submitted personal comments that I described  in an earlier post.  I explained that I am afraid that the RGGI States are placing so much reliance on their analysis results that they could propose unrealistic allowance reduction trajectories.  It is naïve to treat any model projections of the future energy system without a good deal of skepticism because the electric grid is so complex and currently dependent upon dispatchable resources but the anticipated future grid will rely on wind and solar resources that cannot be dispatched.  Replacement of RGGI-affected sources with intermittent and diffuse wind and solar resources that cannot be dispatched is an enormous challenge with likely unintended consequences.  Therefore, the modeling results should be considered relative to historical observations. 

Since the beginning of the RGGI program, RGGI funded control programs have been responsible for less than seven percent of the observed reductions.  My analyses indicate that most of the observed reductions of emissions are due to fuel switching from coal and residual oil to natural gas and that there are few opportunities for additional switching reductions in most RGGI States.  That means that future reductions are going to have to rely on displacing existing generator operations with zero-emission alternatives.  Ostensibly the auction revenues from RGGI are supposed to encourage development of those alternatives.  I have  found that when the sum of the RGGI investments is divided by the sum of the annual emission reductions the CO2 emission reduction efficiency is $927 per ton of CO2 reduced.  I think that cost per ton reduced is too high to afford to develop the resources necessary for the reductions required to meet the aggressive allowance trajectories proposed.

Conclusion

There were not a lot of comments submitted in response to RGGI Third Program Review.  Most of the comments that were submitted addressed special interests including issues with biomass, explicitly supporting their emissions trading business model, and implicitly supporting the narrative associated with energy transition club that is a big business nowadays. I was disappointed that comments from Pennsylvania advocacy organizations ranked handouts to organizations above the needs of the disadvantage communities they claim to represent. The Nature Conservancy comments were outstanding in a bad way because they not only explicitly pandered to their offsets products but also showed a lack of understanding of air pollution control strategies and requirements that made their comments worthless.

My concerns and those of the affected sources are associated with the future viability of RGGI. The modeling suggests that aggressive allowance reduction trajectories are feasible.  I do not think that the RGGI States acknowledge that the program has not been the primary driver of observed emission reductions and that the auction revenues to date have not been cost-efficient which calls that conclusion into question.  Furthermore, the modeling has not addressed concerns associated with the expectations of zero-emissions technology deployment.  Unless these concerns are considered in the Third Program Design Review recommendations there may be adverse ramifications including higher than expected prices and compliance issues.

The Regional Greenhouse Gas Initiative (RGGI) is a carbon dioxide control program in the Northeastern United States.  One aspect of the program is a program review that is a “comprehensive, periodic review of their CO2 budget trading programs, to consider successes, impacts, and design elements”.  On September 26, 2023 the RGGI States hosted two webinars describing technical modeling & analyses that examined the electricity market, emissions, and economic impacts of potential changes to RGGI.  This post describes the disconnect between the results of RGGI to date relative to the expectations in the RGGI Third Program Review modeling that I addressed in my comments to RGGI.

I have been involved in the RGGI program process since its inception.  I 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.  However, 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”.

Third Program Review

The RGGI participating states hosted two public meetings on September 26, 2023, to discuss updates on the Third Program Review and electricity sector analysis.  Meeting materials included the following: Meeting Agenda PDF; Presentation Slides PDF; Topics for Consideration PDF; Draft RGGI Emissions Dashboard ArcGIS Dashboard; RGGI Emissions Dashboard Draft User Guide PDF; Meeting Recording – Session 1, Meeting Recording – Session 2 and Draft IPM Matrix Case Results XLSX.  

The RGGI States contracted ICF to analyze the different scenarios to inform the options for future RGGI.  ICF has a proprietary model, the Integrated Planning Model (IPM^©), that has been used by the RGGI States since the inception of the program and which EPA uses to evaluate many of its control policies.  According to ICF:

ICF’s Integrated Planning Model provides true integration of wholesale power, system reliability, environmental constraints, fuel choice, transmission, capacity expansion, and all key operational elements of generators on the power grid in a linear optimization framework. The model captures a detailed representation of every electric boiler and generator in the power market being modeled.

In March the RGGI States explained that they planned to use IPM to evaluate several issues.  One problem is “fluidity of state participation”.  Nine states have been members of RGGI since its inception.  New Jersey was a charter member, got out, and now is back in; Virginia was in but is now getting out; and  Pennsylvania is trying to get in but participation has been stalled by litigation.  RGGI planning must address climate and complementary energy policies that will dramatically impact electricity load such as electric vehicles and EV infrastructure, electrification in the building sector, and aggressive energy efficiency efforts.  A major concern of the program review was allowance availability so the decarbonization timeline for the electricity sector was considered.  This is complicated because participating State timelines vary, implementation of offshore wind deployment affects decarbonization rates and grid-scale battery storage deployment, duration, and supply certainties affect the outcomes.

The September 26 webinar described three key observations from the modeling results:

1. Modeling shows how current state decarbonization and renewable requirements can significantly reduce emissions;
2. Federal incentives for clean energy have the potential to rapidly transform the RGGI region generation mix; and
3. Scenarios modeled to date show relatively low allowance prices compared to the ECR/CCR price triggers in the Model Rule

The RGGI States have not proposed their plans for the Third Program Review.  The modeling observations support the idea that the RGGI allowance availability can be made more stringent.  So much so that the modeling plans changed from the spring to add a more stringent trajectory to reach zero emissions by 2035 rather than just looking at a zero emissions by 2040 trajetory.  My comments addressed these key observations . 

I will summarize my concerns below but first it is necessary to review RGGI results to date.

RGGI Results to Date

There is an unfortunate disconnect between the results of RGGI to date relative to the expectations in the Third Program Review.  During the September 26 meeting the explanation of cap-and-trade systems stated that “States reinvestthe proceeds in decarbonization and other programs to deliver benefits to their communities.”  What was missing was any mention of the efficacy of those investments relative to the emission reductions observed. 

The primary cause of the observed RGGI emission reductions has been the fuel switch from coal and residual oil to natural gas.   Table 1 lists the emissions by fuel types for the nine RGGI states that have been members since the start.  I believe that RGGI had very little to do with these fuel switches because fuel costs are the biggest driver for operational costs and natural gas was cheaper.  The cost adder of the RGGI carbon price to date has been too small to drive the conversions from coal and oil to natural gas.

Table 1: RGGI Program Unit CO2 Emissions (tons) by State and Year

RGGI sources within the nine-state region have already implemented most of the coal and residual oil fuel switching opportunities available so this control strategy will be less impactful in the future.  For example, in New York coal-fired electric generation has been banned and the remaining units that burn residual oil primarily run to only provide critical reliability support so their emissions are not expected to change much from current levels.  In the future, RGGI affected source emission reductions will rely on the displacement of natural gas fired units with wind and solar zero emitting sources.

The 2021 investment proceeds report released on June 27, 2023 provides insight into the success of RGGI investments as an emission reduction tool.  The report breaks down the investments into five major categories:

Energy efficiency makes up 51% of 2021 RGGI investments and 55% of cumulative investments. Programs funded by these investments in 2021 are expected to return about $418 million in lifetime energy bill savings to more than 34,000 participating households and over 570 businesses in the region and avoid the release of 2.3 million short tons of CO2.

Clean and renewable energy makes up 4% of 2021 RGGI investments and 13% of cumulative investments. RGGI investments in these technologies in 2021 are expected to return over $600 million in lifetime energy bill savings and avoid the release of more than 1.7 million short tons of CO2.

Beneficial electrification makes up 13% of 2021 RGGI investments and 3% of cumulative investments. RGGI investments in beneficial electrification in 2021 are expected to avoid the release of 370,000 short tons of CO2 and return nearly $164 million in lifetime savings.

Greenhouse gas abatement and climate change adaptation makes up 11% of 2021 RGGI investments and 8% of cumulative investments. RGGI investments in greenhouse gas (GHG) abatement and climate change adaptation (CCA) in 2021 are expected to avoid the release of more than 10,000 short tons of CO2 and to return over $20 million in lifetime savings.

Direct bill assistance makes up 14% of 2021 RGGI investments and 13% of cumulative investments. Direct bill assistance programs funded through RGGI in 2021 have returned over $29 million in credits or assistance to consumers.

There is an important caveat to the emission reductions reported in the report.  The RGGI compliance metric is annual emissions and the above quote lists the lifetime emission reductions.  The sum of the lifetime emission reductions from the 2021 investments is 4.38 million tons but the annual emission reductions due to RGGI investments were only 235,299 tons (Figure 1).  The 9-state allowance allocation annual reduction in 2021 was 2,275,000 allowances so RGGI was only responsible for around 10% of the emission reductions required.

Figure 1: Table 1 from the 2021 investment proceeds report

The results in 2021 are consistent with historical observations.   To make a comparison to the CO2 reduction goals I had to sum the annual values in the previous reports because RGGI does not report the annual RGGI investment CO2 reduction values accumulated since the beginning of the program.  Table 2  lists the annual avoided CO2 emissions generated by the RGGI investments from previous reports.  The accumulated total of the annual reductions from RGGI investments is 3,893,925 tons while the difference between the three-year baseline of 2006-2008 and 2021 emissions is 58,334,373 tons.  The RGGI investments are only directly responsible for 6.7% of the total observed annual reductions over the baseline to 2021 timeframe! 

Table 2: Accumulated Annual RGGI Benefits Through 2021

Dividing the total RGGI investments by the total tons reduced provides the cost per ton reduced.  The cumulative RGGI investment cost effectiveness is $927 per ton reduced.  That is far more than the Resources for the Future Social Cost of Carbon estimate of $185 per ton and indicates that costs exceed societal benefits. 

Concerns with Results – Recommendations are highlighted in bold

 There is a unique aspect of the Third Program Review modeling process that has not been available previously.  There are two independent modeling projections of the New York electricity system resources necessary to meet a zero-emission target by 2040.  The New York Independent System Operator (NYISO) has evaluated scenarios that project the resources necessary to achieve the New York Climate Leadership and Community Protection Act goal of a zero-emissions electricity generating system by 2040.  New York’s Scoping Plan was guided by an  Integration Analysis that modeled the transition.  Comparison of those projections with the Integrated Planning Model (IPM) projections enables a check on how these requirements can reduce emissions using different methodologies.

  The most glaring difference between the RGGI IPM modeling of New York and the New York analyses is the generation fossil-fuels sector (Table 3).  The table subtracts the NYISO Resource Outlook Scenario 1 projected generation from the RGGI IPM modeling allowance supply scenarios for Assumption Set B and Integration Analysis Scenario 2.  The percentage difference shows that the IPM projects substantially more generation than NYISO and the Integration Analysis.

Table 3: Fossil Resource Sector Difference in Generation (GWH) Between the NYISO Resource Outlook and the RGGI IPM and Scoping Plan Integration Analysis Strategic Use of Low-Carbon Fuels Scenario

Because RGGI affected source emissions are so strongly correlated with operations these higher operating rates mean that the RGGI IPM modeling projects lower fossil-fired emissions than either model.  In Table 4 I estimated New York CO2 emissions by multiplying these projected generation differences times the 2022 calculated CO2 emission rate per MWh.  In the NYISO Resource Outlook column the emissions are relative to those scenario differences.  Similarly, the emission differences in the Integration Analysis are relative to the Scoping Plan projections.  IPM underestimates the fossil sectors emissions significantly.

Table 4: Fossil Resource Sector Difference in Projected CO2 Emissions (tons) Between the RGGI IPM and NYISO Resource Outlook and Scoping Plan

The RGGI States chose not to include any allowance supply numbers so I was forced to make my own estimates to determine the significance of these emissions.  I projected allowance availability using a linear interpolation between 2023  allowance allocations and zero by 2035 and 2040.  For the zero by 2040 allowance supply scenario, the 2030 emissions difference represents 27% of my estimated allowance allocation.  For the zero by 2035 allowance supply scenario, the 2030 emissions difference represents 42% of my estimated allowance allocation.  This suggests that this modeling difference needs to be reconciled to determine its impact on the RGGI State allowance allocation trajectory proposal. 

There is another issue associated with the modeling results.  The ICF description of these modeling results notes that “due to the stringency of the program after 2040, the model shows an over-compliance of emissions in the early years (2025-2030) and banking of those allowances for when the cap is reduced in 2035 and beyond. “  This is an artifact of the perfect foresight methodology of IPM and, I believe, is unlikely to occur.

I think this is wrong because the modeling approach claims affected sources “over-comply”.  RGGI sources do not “over-comply” but rather acquire allowances to meet their compliance obligations with a slight surplus to ensure compliance  My primary concern is New York and in New York sources that could fuel switch to natural gas have already done so.  They cannot directly affect their compliance except by limiting operations.  Thus, RGGI sources in NY are at the point where they must rely on renewable energy to displace their need to operate.  This means that they only purchase the allowances they expect to use for their compliance obligations plus a small compliance cushion. 

Based on the modeling description, IPM “perfect foresight” projects results over longer planning horizons than used in practice.  I believe that affected-sources across RGGI treat the allowance requirements as a short-term, no more than a couple of compliance periods, compliance obligation.  It is highly unlikely that most affected sources are making plans beyond short-term compliance periods so the idea that affected source would over-comply in early years for more stringent limits ten years ahead is incorrect.  The open question is how does this affect the allowance trajectories.  It might also account for differences between the NYISO and Integration Analysis projections.  The best way to reconcile this is in an open public forum with the modeling groups.

  Renewable developments are struggling due to soaring interest rates and rising equipment and labor costs.  Reuters describes two “procured” projects in the RGGI region that have been cancelled:

(AGR.N), a U.S. subsidiary of Spanish energy firm Iberdrola (IBE.MC), said it filed agreements with power companies in Connecticut to cancel power purchase agreements for Avangrid’s proposed Park City offshore wind project.

               “One year ago, Avangrid was the first offshore wind developer in the United States to make public the unprecedented economic headwinds facing the industry,” Avangrid said in a release.

               Those headwinds include “record inflation, supply chain disruptions, and sharp interest rate hikes, the aggregate impact of which rendered the Park City Wind project unfinanceable under its existing contracts,” Avangrid said.

                              Avangrid has said it planned to rebid the Park City project in future offshore wind solicitations.

               Also over the past week, utility regulators in Massachusetts approved a proposal by SouthCoast Wind, another offshore wind developer, to pay local power companies a total of around $60 million to terminate contracts to provide about 1,200 MW of power.

  In New York, on October 12, 2023 the Public Service Commission turned down a request to address the same cost issues. Times Union writer Rick Karlin summarizes:

               At issue was a request in June by ACE NY, as well as Empire Offshore Wind LLC, Beacon Wind LLC, and Sunrise Wind LLC, which are putting up the offshore wind tower farms.

               All told, the request, which was in the form of a filing before the PSC, represented four offshore wind projects totaling 4.2 gigawatts of power, five land-based wind farms worth 7.5 gigawatts and 81 large solar arrays.

               All of these projects are underway but not completed. They have already been selected and are under contract with the New York State Energy Research and Development Authority, or NYSERDA, to help New York transition to a clean power grid, as called for in the Climate Leadership and Community Protection Act, approved by the state Legislature and signed into law in 2019.

Developer response to the PSC decision suggests that “a number of planned projects will now be canceled, and their developers will try to rebid for a higher price at a later date — which will lead to delays in ushering in an era of green energy in New York”. Karlin also quotes Fred Zalcman, director of the New York Offshore Wind Alliance: “Today’s PSC decision denying relief to the portfolio of contracted offshore wind projects puts these projects in serious jeopardy,”

These issues impact the proposed RGGI allowance trajectories based on the “potential to rapidly transform the RGGI region generation mix”. The IPM modeling projects significant emission reductions presuming that procured renewable energy projects will come on line consistent with the contracts at the time of the modeling. The two cancelled projects in New England total 2,000 MW and the threatened New York wind projects total 11,700 MW. Any projects delayed mean RGGI-affected source emissions will not be displaced as originally expected. If the allowance trajectory proposed does not account for this new information, then compliance will be threatened because affected sources have so few options available to reduce emissions. I recommended that a RGGI IPM modeling scenario be run to consider the effect of a delayed implementation schedule before finalizing Third Program Review recommendations. In fact, given the importance of renewable development on the emission trajectories it might even be appropriate to delay the timing of completion of this program review.

There is another consideration regarding feasibility. As noted above, the accumulated annual emission reductions due to RGGI investments is 3,893,925 tons and RGGI investments over the same time frame total $3,608,950,013 so the cost per ton avoided is $927. If the only source of future emission reductions were the result of RGGI investments, then RGGI allowance prices would have to equal $927 to get the necessary reductions. Of course, other investments will also reduce emissions but the RGGI States should consider cost considerations for the viability of renewable energy resources needed to get RGGI affected source emissions to zero. None of these models address this uncertainty.

The final observation noted at the September 26 webinar was that “Scenarios modeled to date show relatively low allowance prices compared to the ECR/CCR price triggers in the Model Rule”.  Low allowance prices indicate that emissions are lower than the allowances auctioned so there is a surplus of allowances.  My description of RGGI results to date noted that RGGI-affected sources have limited options to switch from coal and residual oil to natural gas.  I expect that as the opportunities to switch fuels diminish that the allowance market will get tighter and allowance prices will go up.  This could trigger the RGGI cost containment reserve.   If allowance prices exceed predefined price levels,  this RGGI feature will release additional allowances to the market.  If the allowance trajectory is too aggressive and emissions do not decrease as expected because wind and solar do not come on line as planned or there is an abnormal weather year increasing load and decreasing wind and solar availability, then there could be a situation where there simply are not enough allowances available for compliance.  The Cost Containment Reserve could prevent this from occurring.  However, no scenarios with this feature have been modeled yet.  I recommended that the RGGI States should model a scenario where the renewable implementation is delayed and the Cost Containment Reserve is employed.

Conclusion

I am afraid that the RGGI States are placing so much reliance on the IPM analysis results that they could propose unrealistic allowance reduction trajectories.  It is naïve to treat any model projections of the future energy system without a good deal of skepticism because the electric grid is so complex and currently dependent upon dispatchable resources.  Replacement of RGGI-affected sources with intermittent and diffuse wind and solar resources that cannot be dispatched is an enormous challenge with likely unintended consequences.  Therefore, the results should be considered relative to historical observations. 

I don’t see much indication that the RGGI States are considering the results of RGGI to date.  I am leery of any model projections of this future system but I have much greater faith in projections by the NYISO because they are responsible for electric system reliability.  I think there are significant differences between the NYISO projections and IPM.  Until those differences are reconciled, I will be skeptical.  Kevin Kilty summed up a rational approach to the use of model results that I fear the RGGI States will ignore: “Beware.  Expect Surprises. Expensive Ones”.

This is the sixth installment of my annual updates on the Regional Greenhouse Gas Initiative (RGGI) annual Investments of Proceeds report.  This post compares the claims about the success of the investments against reality.  As in my previous posts I have found that the claims that RGGI successfully provides substantive emission reductions are unfounded.

I have been involved in the RGGI program process since its inception.  I 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 (Factsheet). It has been a cooperative effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont to cap and reduce CO2 emissions from the power sector since 2008.  New Jersey was in at the beginning, dropped out for years, and re-joined in 2020. Virginia joined in 2021 and is getting out at the end of this year.  Pennsylvania has joined but is not actively participating in everything due to on-going litigation. According to a RGGI website: “The RGGI states issue CO2 allowances which are distributed almost entirely through regional auctions, resulting in proceeds for reinvestment in strategic energy and consumer programs. Programs funded with RGGI investments have spanned a wide range of consumers, providing benefits and improvements to private homes, local businesses, multi-family housing, industrial facilities, community buildings, retail customers, and more.”

Proceeds Investment Report

The 2021 investment proceeds report was released on June 27, 2023.  According to the press release:

The participating states of the Regional Greenhouse Gas Initiative (RGGI) today released a report tracking the investment of proceeds generated from RGGI’s regional CO2 allowance auctions. The report tracks investments of RGGI proceeds in 2021, providing state-specific success stories and program highlights. The RGGI states have individual discretion over how to invest proceeds according to state-specific goals. Accordingly, states direct funds to a wide variety of programs, touching all aspects of the energy sector.

In 2021, $374 million in RGGI proceeds were invested in programs including energy efficiency, clean and renewable energy, beneficial electrification, greenhouse gas abatement, and direct bill assistance. Over their lifetime, these 2021 investments are projected to provide participating households and businesses with $1.2 billion in energy bill savings and avoid the emission of 4.4 million short tons of CO2.

The largest share of the investments was directed to energy efficiency, with 51% of the 2021 total. Other categories receiving significant investments include direct bill assistance, clean and renewable energy programs, beneficial electrification, and greenhouse gas abatement and climate adaptation programs. For more details on both 2021 and cumulative investments and benefits.

The report breaks down the investments into five major categories:

Energy efficiency makes up 51% of 2021 RGGI investments and 55% of cumulative investments. Programs funded by these investments in 2021 are expected to return about $418 million in lifetime energy bill savings to more than 34,000 participating households and over 570 businesses in the region and avoid the release of 2.3 million short tons of CO2.

Clean and renewable energy makes up 4% of 2021 RGGI investments and 13% of cumulative investments. RGGI investments in these technologies in 2021 are expected to return over $600 million in lifetime energy bill savings and avoid the release of more than 1.7 million short tons of CO2.

Beneficial electrification makes up 13% of 2021 RGGI investments and 3% of cumulative investments. RGGI investments in beneficial electrification in 2021 are expected to avoid the release of 370,000 short tons of CO2 and return nearly $164 million in lifetime savings.

Greenhouse gas abatement and climate change adaptation makes up 11% of 2021 RGGI investments and 8% of cumulative investments. RGGI investments in greenhouse gas (GHG) abatement and climate change adaptation (CCA) in 2021 are expected to avoid the release of more than 10,000 short tons of CO2 and to return over $20 million in lifetime savings.

Direct bill assistance makes up 14% of 2021 RGGI investments and 13% of cumulative investments. Direct bill assistance programs funded through RGGI in 2021 have returned over $29 million in credits or assistance to consumers.

Emissions Reductions

In my previous articles on the Proceeds reports, I have argued that RGGI mis-leads readers when they claim that the RGGI states have reduced power sector CO2 pollution over 50% since 2009. In the following table, I list the 9-state RGGI emissions and percentage reduction from a three-year baseline before the program started in 2009.

I have argued that the implication in the report’s 50% claim is that the RGGI program investments were primarily responsible for the observed reduction even as the economy grew (Figure 1 from the report).

I believe that their insinuation that RGGI was primarily responsible for the emission reductions is wrong.  The following table lists the emissions by fuel types for these nine RGGI states.  It is obvious that the primary cause of the emission reductions was the fuel switch from coal and residual oil to natural gas.  This fuel switch occurred because it was economic to do so.  I believe that RGGI had little to do with these fuel switches because fuel costs are the biggest driver for operational costs and the cost adder of the RGGI carbon price was too small to drive the use of natural gas over coal and oil. 

I believe that the appropriate measure of RGGI emissions reductions is the decrease due to the investments made with the auction proceeds so I compared the annual reductions made by RGGI investments.  The biggest flaw in the RGGI report is that it does not provide the annual RGGI investment CO2 reduction values accumulated since the beginning of the program.  In order to make a comparison to the CO2 reduction goals I had to sum the values in the previous reports to provide that information. 

The following table lists the annual avoided CO2 emissions generated by the RGGI investments from previous reports.  The accumulated total of the annual reductions from RGGI investments is 3,893,925 tons while the difference between the three-year baseline of 2006-2008 and 2021 emissions is 58,334,373 tons.  The RGGI investments are only directly responsible for 6.7% of the total observed annual reductions over the baseline to 2021 timeframe! 

Although proponents claim that this program has been an unqualified success I disagree.  Based on the numbers there are some important caveats to the simplistic comparison of before and after emissions.   The numbers in the previous paragraph show that emission reductions from direct RGGI investments were only responsible for 6.7% of the observed reductions.   In a detailed article I showed that fuel switching was the most effective driver of emissions reductions since the inception of RGGI and responsible for most of the reductions.

Benefits

Table 1 from the report lists two benefits of 2021 RGGI Investments: emission reductions and energy bill savings.  Energy bill savings derive from investments in energy efficiency savings and other efforts that directly reduce costs to consumers.  These energy saving benefits typically account for total savings over the lifetime of the project investment.  RGGI does the same thing with the CO2 emission reductions but I think that is misleading because the emission reduction metric is annual emissions and not lifetime emissions. 

Emission Reduction Cost Efficiency

There is another aspect of this report that is mis-leading and after arguing with RGGI and New York State about the issue, I have concluded that the deception is intentional.  In particular, I believe that a primary concern for GHG emission reduction policies is the cost effectiveness of the policies and I have argued that this report should provide the information necessary to determine a cost per ton reduced value for control programs for comparison to the social cost of carbon.  If the societal benefits represented by the social cost of carbon for GHG emission reductions are greater than the control costs for those reductions, then there is value in making the reductions.  If not, then the control programs are not effective.

Recall that RGGI provides lifetime CO2 emission reductions but I think that is misleading because it suggests that the emission reduction cost efficiency of the investments is the total investments divided by the lifetime benefits of those benefits.   For example, dividing the 2021 investments of $374 million by the lifetime avoided CO2 emissions (4,445,594) yields a value of $84.  The Biden administration is re-evaluating the social cost of carbon values but for the time being has announced an initial estimate of $51 per ton and this suggests that RGGI investments are close to being cost effective relative to the Federal social cost of carbon.

However, the social cost of carbon value is calculated for an annual reduction of one ton.  In particular, the social cost of carbon is an estimate, in dollars, of the present discounted value of the benefits of reducing annual emissions by a metric ton. I believe that using the lifetime emissions approach is wrong because it applies the social cost multiple times for each ton reduced.  It is inappropriate to claim the benefits of an annual reduction of a ton of greenhouse gas over any lifetime or to compare it with avoided emissions.  In my comments on the New York Climate Act Scoping Plan, I explained that the value of carbon for an emission reduction is based on all the damages that occur from the year that the ton of carbon is reduced out to 2300.  Clearly, using cumulative values for this parameter is incorrect because it counts those values over and over.  I contacted social cost of carbon expert Dr. Richard Tol about my interpretation of the use of lifetime savings and he confirmed that “The SCC should not be compared to life-time savings or life-time costs (unless the project life is one year)”. 

In order to calculate the CO2 emissions reduction efficiency consistent with the social cost of carbon, the proper estimate is the total investments since the start of the program divided by sum of the annual emission reductions.  The problem is that the RGGI reports do not provide that total and instead only provide the sum of the annual lifetime CO2 avoided emissions.  The Proceeds reports always include a caveat that the states continually refine their estimates and update their methodologies, but the annual numbers are not updated to reflect those changes.  Ideally to get the best estimate of the annual numbers the RGGI states should provide the revised annual numbers for each year of the program. Because that is not the case, I have had to rely on the original annual numbers provided in previous editions of the report.  I sum the values in the previous reports to provide that information as shown in the Accumulated Annual Regional Greenhouse Gas Initiative Benefits Through 2021 table shown above.  The accumulated total of the annual reductions from RGGI investments is 3,893,925 tons through December 31, 2021. The sum of the RGGI investments in the previous table is $3,608,950,013 over that time frame.  The appropriate comparison to the social cost of carbon is $3.609 billion divided by 3,893,925 tons or $927 per ton reduced. 

Conclusion

The 2021 RGGI Investment Proceeds report tries to put a positive spin on the poor performance of RGGI auction proceeds reducing CO2.  The alleged purpose of the program is to reduce CO2 from the electric generating sector to alleviate impacts of climate change.  Since the beginning of the RGGI program RGGI funded control programs have been responsible for 6.7% of the observed reductions.  The report does not directly provide the numbers necessary to calculate that estimate which I have come to believe is deliberate.  When the sum of the RGGI investments is divided by the sum of the annual emission reductions the CO2 emission reduction efficiency is $927 per ton of CO2 reduced.  I conclude that although RGGI has been effective raising revenues it is not an effective CO2 emission reduction program.

This is version of an article that was published at Watts Up With That.

The Regional Greenhouse Gas Initiative (RGGI) is a carbon dioxide control program in the Northeastern United States.  One aspect of the program is a program review that is a “comprehensive, periodic review of their CO2 budget trading programs, to consider successes, impacts, and design elements”.  Because it is often cited as a successful cap and invest control program it is worthwhile to review the status of the Third Program Review after the March 29, 2023 public meeting.

I have been involved in the RGGI program process since its inception.  I 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.

Proponents tout RGGI as a successful program because participating states have “cut carbon pollution from their power plants by more than half, improved public health by cutting dangerous air pollutants like soot and smog, invested more than $3 billion into their energy economies, and created tens of thousands of new job-years”.  Others have pointed out that RGGI was not the driving factor for the observed emission reductions.  My latest evaluation of RGGI results found that the investments from RGGI auction proceeds were only directly responsible for 6% of the total observed annual reductions over the baseline to 2020 timeframe and that those investments reduced emissions at a rate of $818 per ton of CO2.  The primary driver of observed reductions was cost-efficient fuel switching from coal and residual oil to natural gas not RGGI.  I concluded that RGGI successfully raised money but has not provided cost-effective emission reductions or has had much to do with the observed CO2 emission reductions in the electric generating sector of the NE United States.

Third Program Review

The RGGI states periodically review the “successes, impacts, and design elements” of the program.  On March 29, 2023 RGGI Inc. and the participating states gave an update on the status of the third program review.  The presentation gave an overview of the program, explained how the review process works, described state activities, and described the electric sector analysis.  Meeting materials including comments submitted after the meeting are available:

• Meeting Agenda
• Presentation Slides
• Meeting Recording – Session 1
• Meeting Recording – Session 2
• Public comments for the meeting

The March 29 public meeting was more of an overview than anything else.  Nonetheless a couple of interesting points made.  The overview emphasized that program components allow for regional compatibility because each state has its own implementing regulations.  I believe this is recognition of the fact that different state emission targets need to be considered in the program more than in the past.  There is a new environmental justice (EJ) component that includes a regional CO2 mapping tool.  I think this component will be of particular interest to WUWT readers because EJ considerations are a component of all recent environmental initiatives.

The primary technical considerations for the planned program review modeling are the regional cap trajectory, Cost Containment and Emissions Containment Reserves changes, and  adjustments for banked allowances.  This round of modeling must contend with the “fluidity of state participation” which translates to what to do about Pennsylvania and Virginia.  Pennsylvania participation is “still in effect” but it is still in litigation so there is a major uncertainty relative to the modeling.  Virginia is going to cease participation at the end of 2023 and they have told RGGI that their participation should not be included in the modeling.  The emissions from these two states are a significant portion of the current inventory so participation affects the potential for regional emission reductions as shown in the following table.  In 2022 Pennsylvania emissions were 42.5% of the total CO2 emissions of all RGGI states and Virginia was another 13% as shown below. From the standpoint of potential emission reductions note that Pennsylvania still had a significant amount of coal in 2022.  Note that the recently announced retirement of Homer City will result in a 2% reduction of overall RGGI emissions.

There are two other factors that complicate this modeling effort.  The presentation noted that “climate and complementary energy policies will dramatically impact electricity load”.  In other words, when transportation and residential/commercial  energy use is converted to electricity the load will go up. In addition, the decarbonization timeline for the electricity sector in states vary.  The presentation also highlighted the implementation of offshore wind deployment and grid-scale battery storage deployment, duration, and supply as factors that add challenges and uncertainty to the modeling.

In order to address these issues, they are looking at different ways of dealing with the uncertainty by developing “assumption sets based on load forecasts and availability of low-emitting generation” and various allowance supply scenarios.  They think that adding cases will cover the range of outcomes given current electricity-sector developments and that the “results will inform development of potential policy cases”.

The load forecast and availability of low-emitting generation discussion (video at 21:20) provides the modeling framework.  As shown in the slide below they are considering three assumption sets ranging from “procured” clean energy and energy forecasts in line with ISO baseline estimates to two levels of additional clean energy and load growth.  I think this is particularly important because the timelines have major implications.  An increasingly large percentage of future electric generation unit emission reductions is only possible if clean energy deployment displaces fossil generating facilities.  There are significant uncertainties associated with clean energy development because of supply chain issues, lack of experienced personnel, and the need for extensive supporting infrastructure.  If allowance supply trajectories presume greater displacement of emitting sources than occurs, then there will not be enough permits to emit which could lead to artificial energy shortages.  The assumption sets should consider those timing issues.

Stakeholder Comments

Four specific questions for input from stakeholders were posed (video at 30:19)

• How comfortable are you with the assumptions that have been included?
• Are there other assumptions that need to be included in these scenarios?
• Is there anything that we can do to improve the understanding of the differences between the cases?
• For which scenarios are stakeholders most interested in seeing results for further Program Review consideration?

Written comments were submitted in response to the request for input from, an emissions trading group, an organization representing New York generating companies, one individual (that would be me), one affected generating company, and six environmental/social justice organizations.  The International Emissions Trading Association (IETA), Environmental Energy Alliance of New York, and myself addressed the specific questions raised as the primary focus.  LS Power Development mentioned the questions asked but was more interested in furthering their own renewable energy development agenda.  The six environmental/social justice organizations (Alternatives for Community & Environment et al., Conservation Law Foundation et al., Earthjustice et al., Environmental Defense Fund, Interreligious Eco-Justice Network et al., and RGGI Advocates Coalition) were primarily concerned with the EJ component.

RGGI Environmental Justice

Environmental justice (EJ) is a featured component of recent environmental policies. It also is a feature of the Green New Deal that “has been used to describe various sets of policies that aim to make systemic change”.  In my opinion the rationale that the transition away from fossil fuels is required is only  a pretext for all the systemic changes desired by advocates who are a primary constituency of the Progressive Democrats.  The question is how do these factors get integrated into environmental policy.

Democrats are not the only ones trying to cater to “environmental justice communities, tribal groups, the labor sector, and other equity groups” that the Conservation Law Foundation mentions in its comments.  It turns out that the big green environmental organizations are going out of their way to cater to these groups as part of a larger goal to impact the nation’s culture.  Environmental organizations are trying to align with social justice organizations to strengthen their bona fides with the Progressives.  The Acadia Center report RGGI Findings and Recommendations for the Third Program Review was referenced by four of the six organizations so I will use it to illustrate the objectives.  .

The Acadia report claims that RGGI states have experienced both a more rapid increase in GDP per capita and a more rapid decline in both power sector CO2 emissions and retail electricity prices relative to other states.  I am not going to address this because I don’t have time and it does not directly address the EJ concerns.  Instead consider the following quotes from the Executive Summary:

The objective of RGGI is, first and foremost, reducing greenhouse gas emissions while supporting economic growth. Although RGGI is not directly an air quality program, because it applies to power plants, it can be an effective vehicle to deliver reductions in criteria air pollutants and better outcomes to communities that are located near power plants. RGGI has delivered important ancillary benefits like an 85% reduction in nitrogen oxides (NOx) in RGGI-regulated power plants over the entire region. Criteria emissions, particularly NOx, can have significant detrimental health impacts including damaging the respiratory tract and increasing vulnerability to respiratory infections and asthma.

In order to connect GHG emission reductions with immediate effects, the relationship with other air pollutants is used.  As mentioned previously RGGI was not the primary driver for the CO2 reductions observed and the situation is the same for NOx.  Moreover, during this period there were NOx-specific control programs that contributed to the observed reductions.

However, the approach of reducing CO2 emissions in aggregate across the region does not necessarily result in a more rapid rate of decline in NOx emissions in EJ communities compared to other areas. Acadia Center analysis found that, between 2008 and 2021:

• NOx emissions from power plants within 3 miles of a community with high EPA Environmental Justice Socioeconomic Indicators (“EPA EJSI community,”see sidebar for more information) declined by 85%, compared to the rest of the RGGI power plant fleet, where NOx emissions declined by 88%
• Over a third of RGGI plants that are releasing NOx emissions near communities suffering from disproportionately high rates of asthma
• Over two-thirds of RGGI plants do not have any active air quality monitoring sites within a 3-mile  radius to measure the impact on neighboring communities – and over three quarters of these unmonitored plants are located near an EPA EJSI community or high asthma communities (see the highlight at the end of this section for more details on both community classifications)

Organizations like the Acadia Center are selectively choosing what information to present both in these comments and to the environmental justice community.  The suggestion that there is a significant difference between communities within three miles of a power plant with “only” an 85% decrease as compared to an 88% decrease elsewhere suggests greater accuracy than warranted.  Unremarked is whether the 85% reduction in emissions had any observable effect on the asthma rates.  I would be more sympathetic if they could show a relationship.  In order to prove or disprove the relationship claimed emissions are only part of the picture.  The bigger point is that NOx impacts are local and must be assessed using air quality modeling. The final bullet about air quality monitoring is a bogus argument.  State and Federal air quality monitoring programs have a long history.  Every power plant in the country has been modeled to confirm local air quality impacts do not exceed the National Ambient Air Quality Standards and most also had an ambient air quality monitoring network at one time to verify that the modeling was correct.  I know this because I did work as a consultant to EPA evaluating the models using the monitoring data and later was responsible for monitoring networks at four power plants.  The bottom line is that the history of modeling and monitoring is so extensive that if there was any question that there could be an issue with these facilities, then it was laid to rest long ago.  That is why there are no nearby air quality monitors today.  Despite this history one of the EJ recommendations is to do community air quality modeling which I believe is not up to the same standard as regulatory air monitoring programs.

In addition to the demand for local air quality monitoring, commenters argued that more public participation is necessary.  For example, the Conservation Law Foundation comments argued that “It is imperative that equity and environmental justice considerations be more thoroughly integrated into modeling, rather than treated as a separate issue for resolution”.  They went on to suggest:

More specifically, the RGGI program and the RGGI Program Review process must be reformed to improve the amount and quality of public participation, develop and conduct equity analyses, and increase investments in overburdened communities.

We must ensure that environmental justice communities, tribal groups, the labor sector, and other equity groups have access to the financial and technical resources they need to meaningfully participate in the RGGI Program Review process. RGGI, Inc. can accomplish this by publishing public notices of RGGI Program Review meetings and comment periods more widely, including by social media and using physical notices in high-traffic gathering places such as grocery stores and community centers.

Color me skeptical but I doubt that any individual who hears about RGGI public meetings from a public notice posted in a grocery store is going to be able to provide meaningful comment on the design elements of RGGI.   The suggestion that these groups have “access to the financial and technical resources” necessary to participate seems to be a recommendation designed to garner funding so the environmental organizations can, for example, “develop and conduct equity analyses” for problems that the environmental justice communities did not even know they had. 

The other major component in the EJ comments was a recommendation to allocate a major share of the proceeds in the disadvantaged communities.  The Conservation Law Foundation comments state that “By taking the funds received from RGGI and reinvesting them in communities most unduly burdened by lack of resources, unequal access to energy infrastructure, and who pay a disproportionate amount of their income to necessities such as utility bills, these monies can have an additive effect that will help to accelerate state and federal decarbonization goals in a just and equitable manner.”  In my opinion these organizations are doing a dis-service to these communities by pushing these decarbonization goals despite over-whelming evidence that the costs to decarbonize are enormous.  I cannot imagine that investments in energy efficiency, retrofitting and electrifying homes in these areas, and providing other energy reduction measures in these communities will offset the increased costs to those least able to afford them.

Conclusion

The third RGGI program review process has some difficult technical issues to address.  At the top of the list is that in order to further reduce electric generation CO2 emissions it is necessary to rely on wind and solar resources to displace the need for the existing units to operate as much.  If the future RGGI allowance caps don’t consider the feasibility of the transition to alternative generation, then it is possible that the caps will limit generation simply because in the absence of permits to emit aka allowances, the only way for an affected source to comply with the regulations is to stop running.

In order to address this concern, the feasibility of the wind and solar implementation schedule should be assessed and consider supply chain, trained personnel, and permitting limitations.  Obviously, the costs are also a factor.  There is an unrecognized RGGI auction revenue dynamic between the need to invest in the control strategies that reduce emissions and the demands of the environmental activists claiming to act in the best interests of the disadvantaged communities.  The money spent on community air quality monitoring, reaching out to EJ communities, and evaluating equity access all do not reduce CO2 emissions directly or indirectly by reducing energy use.  If too much money is spent on programs that do not lead to emission reductions, then the necessary investments won’t be made and the targets won’t be met.

The addition of the environmental justice component to the program review is a diversion to the RGGI CO2 emission reduction efforts.  I think an emphasis on energy efficiency and energy conservation efforts in disadvantaged communities is necessary to limit the effect of the transition to more expensive electricity.  However, RGGI auction funding should prioritize emission reductions over funding any other EJ programs that do not reduce emissions.  The state emission reduction targets are arbitrary and failing to consider technical feasibility and the funding necessary to provide zero-emissions resources to displace energy from the RGGI-affected sources will not end well.

The Regional Greenhouse Gas Initiative (RGGI) is a carbon dioxide control program in the Northeastern United States.  One aspect of the program is a program review that is a “comprehensive, periodic review of their CO2 budget trading programs, to consider successes, impacts, and design elements”.  This post described the comments I submitted on the third program review process that is underway.

I have been involved in the RGGI program process since its inception.  I blog about the details of the RGGI program because very few seem to want to provide any criticisms of the program.  RGGI is a market-based emissions market program similar to what has been proposed for the Climate Leadership & Community Protection Act (Climate Act.  I have written over 300 articles about New York’s net-zero transition because I believe the ambitions for a zero-emissions economy embodied in the Climate Act outstrip available renewable technology such that the net-zero transition will do more harm than good.  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.

Proponents tout RGGI as a successful program because participating states have “cut carbon pollution from their power plants by more than half, improved public health by cutting dangerous air pollutants like soot and smog, invested more than $3 billion into their energy economies, and created tens of thousands of new job-years”.  Others have pointed out that RGGI was not the driving factor for the observed emission reductions.  My latest evaluation of RGGI results found that the investments from RGGI auction proceeds were only directly responsible for 5.6% of the total observed annual reductions over the baseline to 2020 timeframe and that those investments reduced emissions at a rate of $818 per ton of CO2.  I conclude that RGGI successfully raised money but has not provided cost-effective emission reductions or has had much to do with the observed CO2 emission reductions in the electric generating sector of the NE United States.

Third Program Review

One aspect of the program is a program review that is a “comprehensive, periodic review of their CO2 budget trading programs, to consider successes, impacts, and design elements”.  On March 29, 2023 RGGI Inc. and the participating states gave an update on the status of the third program review.  The presentation gave an overview of the program, explained how the review process works, described state activities, and described the electric sector analysis.  Meeting materials are available:

• Meeting Agenda
• Presentation Slides
• Meeting Recording – Session 1
• Meeting Recording – Session 2

The description of the program review update (video here) used the following slide.  The process is initiated by the states defining revised goals and ambitions which kicks off technical modeling and analysis and a public stakeholder process.  If you have questions about the process this is a good overview.

The meeting described the current modeling considerations, explained the approach and assumptions, and asked for comments on specific aspects of the modeling.  My comments relate to the modeling analyses.  David Coup from NYSERDA described the modeling analysis (video starting at 11:52) using the following slide. The presentation explained that the program review modeling is concerned with the regional cap trajectory, Cost Containment and Emissions Containment Reserves changes, and  adjustments for banked allowances. 

This round of modeling must contend with the “fluidity of state participation” which translates to what to do about Pennsylvania and Virginia.  Pennsylvania participation is “still in effect” but it is still in litigation so there is a major uncertainty relative to the modeling.  Virginia is going to cease participation at the end of 2023 and they have told RGGI that their participation should not be included in the modeling.  The emissions from these two states are a significant portion of the current inventory so participation affects the potential for regional emission reductions.  In 2022 Pennsylvania emissions were 42.5% of the total CO2 emissions of all RGGI states and Virginia was another 13% as shown below. From the standpoint of potential emission reductions note that Pennsylvania still had a significant amount of coal in 2022 and also note that the recently announced retirement of Homer City will result in a 2% reduction of overall RGGI emissions.

There are two other factors that complicate this modeling effort.  The presentation noted that “climate and complementary energy policies will dramatically impact electricity load”.  In other words, the primary decarbonization strategy for buildings and transport is electrification which will necessarily increase load.  In addition, the decarbonization timeline for the electricity sector in states vary.  Those timelines are primarily based on aspirational goals rather than a feasibility analysis to determine how fast wind and solar resources must be deployed to displace existing electric generation to make the mandated emission reductions. The presentation recognized that the implementation of offshore wind deployment and grid-scale battery storage deployment, duration, and supply as factors that add challenges and uncertainty to modeling the decarbonization transition.

In order to address these issues, they are looking at different ways of dealing with the uncertainty by developing “assumption sets based on load forecasts and availability of low-emitting generation” and various allowance supply scenarios.  They think that adding cases will cover the range of outcomes given current electricity-sector developments and that the “results will inform development of potential policy cases”.  While I appreciate the thought, I am concerned that political pressures will preclude any cases that don’t fit the narrative that political timelines will mandate development as needed to meet the schedules.

The load forecast and availability of low-emitting generation discussion (video at 21:20) provides the modeling framework.  As shown in the slide below they are considering three assumption sets ranging from “procured” clean energy and energy forecasts in line with Independent System Operator baseline estimates to two levels of additional clean energy and load growth.  Their definition of procured is that the project is “under contract”.  This is a good example of my concern about the schedule because projects under contract may still be abandoned due to several reasons.  My main concern is that the timelines have major implications.  An increasingly large percentage of future EGU emissions reductions is only possible if clean energy deployment displaces fossil generating facilities because there are no other options left.  There are significant uncertainties associated with clean energy development because of supply chain issues and the need for extensive supporting infrastructure. 

Four specific questions for input from stakeholders were posed (video at 30:19)

• How comfortable are you with the assumptions that have been included?
• Are there other assumptions that need to be included in these scenarios?
• Is there anything that we can do to improve the understanding of the differences between the cases?
• For which scenarios are stakeholders most interested in seeing results for further Program Review consideration?

My comments addressed two of these questions: How comfortable are you with the assumptions that have been included and are there other assumptions that need to be included in these scenarios?

Fifth Compliance Period Status

One of my concerns about the assumptions included is that there are other uncertainties not included.  In my initial comments on the Third Program Review my overall recommendation was to make no changes and see how the RGGI allowance market plays out the transition to the unprecedented emissions trading situation in which the majority of the RGGI allowances are held by entities who purchased allowances for investment rather than compliance purposes. 

My comments described in detail my latest analysis of allowance holdings and emissions confirms compliance entities will have to obtain allowances from non-compliance entities to meet compliance obligations at the end of 2023.  At the end of the fourth quarter of 2022 the RGGI Market Monitoring Report Q4 2022 noted that there were 231 million allowances in circulation.  The report noted that approximately 148 million of the allowances in circulation (64 percent) are believed to be held for compliance purposes.  I estimate that there were 176.6 million allowances in circulation at end of March 2023 and that approximately 89.8 million allowances (51%) were held for compliance purposes.  I estimated the allowance status at end of the 2021-2023 compliance period as 224.9 million allowances in circulation before allowances are surrendered for 2023 emissions with 105.8 million allowances held for compliance purposes.  Assuming that 2023 emissions would be equal to 2022 emissions for all the RGGI states including Pennsylvania means total emissions will be 193.3 million tons.  That means 87.5 million allowances must be obtained from non-compliance entities for compliance and that the next compliance period will start with an allowance bank of only 31.6 million.

Those two unprecedented concerns are not included in the modeling assumptions.  In the fifth compliance period ending December 31, 2023 the compliance entities are going to have to use allowances now held by non-compliance entities and in the sixth compliance period the allowance cap is going to be binding.  I define a binding cap as one chosen arbitrarily without any feasibility evaluation.  The environmental community has demanded a binding RGGI cap for years and it looks like they are going to get their wish in the 2024-2026 compliance period.  My comments stated that these issues should included in the “are there other assumptions that need to be included in these scenarios?” question posed at the March 29 meeting.  Given the importance of these uncertainties I expanded on my concerns.

Non-Compliance Entities

Based on the evaluation described above I estimate that compliance entities will be required to obtain allowances for compliance from non-compliance entities.  In my opinion, it is reasonable to expect that the non-compliance entities that own allowances for investment purposes will expect a premium for their allowances because they know that the penalties for an out of compliance affected source are severe.   This is unprecedented and no one knows what will happen so it is reasonable to see what happens before there are any decisions regarding changes to the allowance allocation trajectories.

There is another non-compliance entity issue.  In previous comments I pointed out that at least one non-governmental environmental entity has purchased allowances and “will be retiring these allowances so that no power plant can use them to emit greenhouse gas”.  I suggested that this ownership entity should be included as a new category in the Potomac Economics market monitoring reports and that a surrender account be established for individuals and organizations that want to use RGGI allowances for offsetting purposes.  The recommendation was ignored so we are left to hope that the Potomac Economics market monitoring report non-compliance entity category has at least 87.5 million allowances that will be available for compliance purposes.

Observed Emission Reductions to Date

There is another uncertainty associated with future emission reductions.  In my previous comments, I showed that fuel switching from coal and residual oil to natura gas has been the primary CO2 reduction methodology to date.   Of particular importance to the future program is that the potential for future fuel switching is limited outside of Pennsylvania.  The following table lists CO2 emissions for each state by primary fuel type.  The retirement of the coal-fired Homer City facility was recently announced and that facility was responsible for 2% of 2022 emissions.   If Pennsylvania joins RGGI as a full-fledged member and coal retirements from its facilities occur in the future the current reduction trajectory is feasible.  If those conditions do not occur then the only way to produce reductions is by displacement with zero-emissions generating sources.  Eventually, investments in zero-emissions resources will be the only method for reducing affected source emissions.

One of my problems with the RGGI cap and invest program is that while it is supposed to be a pollution control program in which the auction proceeds are invested in emission reduction strategies, the proceeds have not prioritized emission reductions.  In my previous comments I noted that the total of the annual reductions claimed by RGGI in their annual Investments of Proceeds updates since 2009 is 2,818,775 tons while the difference in annual emissions between the baseline of 2006 to 2008 compared to 2019 emissions is 72,908,206 tons.  Therefore, the RGGI investments are only directly responsible for less than 5% of the total observed reductions since RGGI began in 2009.  (Note that I did an update for information through 2020 that did not change these findings.)

Binding Cap

Another uncertainty not included in the issues raised at the March 29 meeting is the binding cap.  I define a binding cap as one chosen arbitrarily to meet some emission reduction target without considering the feasibility of emission reductions necessary to meet that target.  The problem that advocates apparently do not understand is that CO2 control is different than other pollutants because there are no cost-effective controls available for existing facilities.  Instead, CO2 reductions at electric generating facilities require development of zero-emissions resources to displace the need for electric energy output at affected sources.  If the energy from those zero-emissions resources is insufficient to replace affected source generation, then the only compliance alternative left is to stop running.  Unplanned outages due to a lack of allowances could lead to reliability issues.

The binding cap must be considered in the context of the reason for the observed emission reductions and the impact of inefficient RGGI proceeds for reductions.  I recommended that assumptions addressing the binding cap issues need to be included in the RGGI scenarios.  The RGGI states all have various CO2 emission reduction mandates that rely on electrification of other sectors.  This will necessarily increase load at the same time the deployment of low-emitting generation will be the primary emission reduction methodology.  EPA cap and trade programs such as the Cross State Air Pollution Rule established caps based on technological evaluation of control options.  The RGGI reduction trajectory was established based more on arbitrary decarbonization timelines than a deployment schedule supported by a feasibility analysis.  The modeling for this program review must include modeling analyses that consider the zero-emissions deployment schedules.  Sensitivity analyses that consider delays to the deployment of wind and solar resources should also be included.

Conclusion

The March 29 meeting raised the important point that there are new uncertainties that need to be incorporated in the assumptions used for the modeling analyses associated with the third program review.  My comments raised additional issues that add uncertainty and should be considered too.

RGGI asked “how comfortable are you with the assumptions that have been included.”  Because future reductions will rely more heavily upon displacement of affected source energy production by wind and solar at the same time emission reductions in other sectors rely on increased electrification, I am particularly concerned about the load forecasts and availability of low-emitting generation assumptions.  The impact of future load growth and the schedule for low-emitting generation deployment should be considered in the modeling at least by sensitivity analyses.

RGGI also asked if there are other assumptions that need to be included in these scenarios?  The RGGI presentation noted significant uncertainties.  I believe that two other uncertainties need to be considered.  My analysis of the status of emissions and allowances shows that compliance entities will have to depend on allowances from the non-compliance entities for the fifth compliance period ending this year.  That analysis also shows that when the sixth compliance period starts in 2024 there will be an extremely small allowance bank.  I believe that these added uncertainties need to be addressed in the modeling for this program review.

The potential problems associated with a cap on allowances that forces affected sources to comply by not operating is an unrecognized issue.  If an overly stringent cap results in an artificial energy shortage, then it will not reflect well on the RGGI states.

In early January I posted an article describing my comments on the New York State Energy Research & Development Authority (NYSERDA) Regional Greenhouse Gas Initiative (RGGI) Operating Plan Amendment (“Amendment”) for 2023.  This is a follow-up that describes what happens to comments in that process.

I have been involved in the RGGI program process since its inception.  I blog about the details of the RGGI program because very few seem to want to provide any criticisms of the program.   I submitted comments on the Climate Leadership and Community Protection Act (Climate Act).  implementation plan and have written over 270 articles about New York’s net-zero transition because I believe the ambitions for a zero-emissions economy embodied in the Climate Act outstrip available renewable technology such that the net-zero transition will do more harm than good.  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.

NYSERDA Board Background

This article describes the NYSERDA Board approval process for the 2023 RGGI Operating Amendment.  The NYSERDA Board description shows that this is another example of a process controlled by the Governor:

NYSERDA is governed by a board consisting of 13 members, including the Commissioner of the Department of Transportation, the Commissioner of the Department of Environmental Conservation, the Chair of the Public Service Commission, and the President and CEO of the Power Authority of the State of New York, who serve ex officio. The remaining nine members are appointed by the Governor of the State of New York with the advice and consent of the Senate and include, as required by statute, an engineer or research scientist, an economist, an environmentalist, a consumer advocate, an officer of a gas utility, an officer of an electric utility, and three at-large members.

At this time only 11 members are listed for the Board.  Three are Department Commissioners, two are from NYSERDA, and the head of the New York Power Authority rounds out six people who are for all intents and purposes part of the Hochul Administration.  All the others have some tie to climate resiliency and sustainability in their past working history or present titles.  

My Comments

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.  On an annual basis, the Authority “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.”  New York State claims that RGGI “has helped reduce greenhouse gases from power plants by more than half and raised nearly $6 billion to support cleaner energy solutions”.  I submitted detailed comments on the RGGI Operating Plan Amendments because the State has not figured out that there are ramifications to the historical success of the RGGI program and compliance implications associated with the RGGI auction proceed investments.

My comments evaluated the CO2 emissions trend of sources that are in the RGGI program.  I showed that between 2000 and 2021 New York EGU emissions have dropped from 57,114,438 tons to 28,546,529 tons, a decrease of 50%.  NYS EGU CO₂ emissions were 39% lower in 2021 than the three-year baseline emissions before RGGI started.  However, I showed that emissions have dropped primarily because coal and oil fueled generation has essentially gone to zero.  Natural gas has increased to cover the generation from those fuels but because it has lower CO₂ emission rates New York emissions have gone down.  I also evaluated the emission reductions that could be attributed to RGGI investments based on NYSERDA reports. I found that RGGI investments account for only 16% of the observed reductions.  This means that RGGI was not particularly successful as an emission reduction control program.

On the other hand, RGGI has successfully raised revenues for New York State.  From the start of the program through the start of the fiscal years considered in the Operating Plan RGGI auctions have raised nearly $6 billion.  My concern is that the relative lack of emission reductions attributable to New York’s RGGI auction proceeds was related to the fact that there was no emphasis on using the proceeds to provide emission reductions.  Because of the success of fuel switching reductions this has not been a concern but now there are no more fuel switching opportunities and because of the Indian Point shutdown, the RGGI unit emissions have gone up.  Going forward it will be increasingly difficult to make emission reductions.  Carbon dioxide emissions are directly tied to fossil-fuel combustion and energy production.  If, for any number of reasons, zero-emissions are not deployed fast enough to displace the energy produced by RGGI sources there might not be enough credits available to cover the emissions necessary to provide energy requirements. I concluded that it is incumbent upon the state to incentivize and subsidize carbon-free generation so that the RGGI sources can reduce operations and not jeopardize system reliability. 

As part of my comments, I also evaluated the programs in the Operating Amendment relative to their value for future EGU emission reductions.  The comments included descriptions of all the programs in the FY23-26 Amendment.  I commented briefly on each proposed program and classified each program relative to six categories of potential RGGI source emission reductions.  The first three categories cover programs that directly, indirectly or could potentially decrease RGGI-affected source emissions.  Those programs total 45% of the investments.  I also included a category for programs that will add load that could potentially increase RGGI source emissions such as programs to incentivize electrification, which totals 27% of the investments.  Programs that do not affect emissions are funded with 21% of the proceeds and administrative costs total another 7%. 

My comments noted that the draft Amendment explains that the programs in the portfolio of initiatives are designed to “support the pursuit of the State’s greenhouse gas emissions reduction goals”.  However, of the five goals only one addresses emission reductions.  The others are vague cover language to justify the use of RGGI auction proceeds as a slush fund for hiding administrative expenses, costs related to Climate Act implementation, and other politically favored projets at the expense of programs that affect CO₂ emissions from RGGI affected sources.  To date this has not been an issue because fuel switching has provided the necessary emission reductions.  However, there could be a problem in the next several years because no more fuel switching reductions are available at the same time that RGGI allowance allocations continue to decrease.  This exacerbates the potential of system reliability issues

Response to Comments

The question that intrigued me was what actually happened with the public stakeholder comments.  There is no response to comments document. There is a memo that presumably summarizes the three-year plan and might describe the public stakeholder’s comments.  If I ever get a copy of that memo, I will update this post.  The public had two opportunities to present comment described below.

The first opportunity for public input ( available at the discussion portion of the meeting video) was at the December 12, 2022 meeting.  The presentation noted that comments at the meeting would be treated as written comments and posted on the website.  Conor Bambrick, Environmental Advocates of New York, spoke at the meeting.  He asked whether the New York Sun program applied to Long Island and was told that it does not.  However, there is another program that does.  He asked whether there were any success stories available for the community heat pump program but the program has not reached that point yet.  He had specific question about components of the clean energy taskforce development program.  He also had some clarifying questions about various programs.  I don’t think any of his questions specifically asked for changes.  There was a comment that funding should not be provided for Hydrogen Hubs because a pilot project showed hydrogen could emit more NOx and Ozone than natural gas.  I am familiar with that project and he got his wires crossed because that is not what happened in the pilot project he referenced.  I do not think that any of these comments warranted a follow-up response so it is not surprising that the website does not include anything from the meeting.

The second opportunity was to submit written comments and two written comments submitted.  The New York Municipal Electric Utilities Association commented that the “Municipal Pilot Program” should be expanded.  As far as I can tell the only change to that program was to shift the dates but the total allocation remains $2.5 million.  My comment was the other one.  I mentioned that the Scoping Plan Implementation Research program was important because there are unresolved issues associated with the Scoping Plan.  The allocation for that program was reduced $1 million to $3 million.

As I noted above, my comments explained that if the operating plan for the RGGI auction proceeds did not invest sufficiently in programs that directly reduce emissions then there is a possibility that affected units may not be able to provide power when needed because they don’t have sufficient allowances to cover operations.  My point was that programs that do not directly, indirectly or could eventually reduce RGGI source emissions by displacing the energy they provide should be emphasized and programs that increase RGGI source emissions should be de-emphasized.  The following table shows that the final version of the amendment plan for RGGI auction proceeds does the exact opposite.  The total funding for RGGI reduction programs drops by $190 million and the % of the total goes down 9% to only 36%.

The NYSERDA Use of Auction Proceeds website describes the operating plan and provides links to the operating plan, the meeting materials for the Stakeholder meeting, and the Comments on the 2023 Draft Amendment.  The  approved Operating Plan Amendment and the transcript for the Board meeting where the Amendment was approved are both available.  I extracted the discussion for the operating plan approval but have not been able to find the memo referred to in the presentation.

The transcript for the meeting includes the following overview by John Williams, Executive Vice President for Policy and Regulatory Affairs  at NYSERDA: 

We’ll move this one along pretty quickly. We’re here with our annual routine RGGI approval process. So the, the Members have received both the three year plan that we’re proposing as well as a memo of summarizing all that. Just some high points here for awareness. You know, we did engage our annual process to come up with our proposal and present that to stakeholders. And on December 12th we held a webinar for receipt of stakeholder input on that. So some participation there and some exchange of thoughts happening at that December 12th webinar. The proposal was also open for written public comments through January 6th, and we did receive a couple of comments there. The proposal you have was you know, does take those public feedback into account

It is obvious that NYSERDA was going through the motions of the stakeholder process.  They had a meeting for stakeholder input, check.  They had a public comment period, check.  They posted both comments received, check.  John Williams told the Board that public feedback was taken into account, check.  They had a  discussion of the Operating Plan Amendment at the Board meeting, check.  John Williams responded to questions that came up during the discussion, check.   The Board voted to approve the Amendment, check.  Mission accomplished.

Response to Comments

The question that intrigued me was what actually happened with the public stakeholder comments.  There is no response to comments document. There is a memo that presumably summarizes the three-year plan and might describe the public stakeholder’s comments.  If I ever get a copy of that memo, I will update this post.  The public had two opportunities to present comment described below.

The first opportunity for public input ( available at the discussion portion of the meeting video) was at the December 12, 2022 meeting.  The presentation noted that comments at the meeting would be treated as written comments and posted on the website.  Conor Bambrick, Environmental Advocates of New York, spoke at the meeting.  He asked whether the New York Sun program applied to Long Island and was told that it does not.  However, there is another program that does.  He asked whether there were any success stories available for the community heat pump program but the program has not reached that point yet.  He had specific question about components of the clean energy taskforce development program.  He also had some clarifying questions about various programs.  I don’t think any of his questions specifically asked for changes.  There was a comment that funding should not be provided for Hydrogen Hubs because a pilot project showed hydrogen could emit more NOx and Ozone than natural gas.  I am familiar with that project and he got his wires crossed because that is not what happened in the pilot project he referenced.  I do not think that any of these comments warranted a follow-up response so it is not surprising that the website does not include anything from the meeting.

The second opportunity was to submit written comments and two written comments submitted.  The New York Municipal Electric Utilities Association commented that the “Municipal Pilot Program” should be expanded.  As far as I can tell the only change to that program was to shift the dates but the total allocation remains $2.5 million.  My comment was the other one.  I mentioned that the Scoping Plan Implementation Research program was important because there are unresolved issues associated with the Scoping Plan.  The allocation for that program was reduced $1 million to $3 million.

As I noted above, my comments explained that if the operating plan for the RGGI auction proceeds did not invest sufficiently in programs that directly reduce emissions then there is a possibility that affected units may not be able to provide power when needed because they don’t have sufficient allowances to cover operations.  My point was that programs that do not directly, indirectly or could eventually reduce RGGI source emissions by displacing the energy they provide should be emphasized and programs that increase RGGI source emissions should be de-emphasized.  The following table shows that the final version of the amendment plan for RGGI auction proceeds does the exact opposite.  The total funding for RGGI reduction programs drops by $190 million and the % of the total goes down 9% to only 36%.

The bottom line is that there is no description describing the response to the comments.  From what I could ascertain the comments received were not “taken into account”. The final amendment did the opposite of what was recommended for two program-specific suggestions.  My overall concern about emphasizing programs that could reduce RGGI emissions was also ignored and funding changed directly opposite of my suggestion.

Conclusion

The only indication that I have that someone read my comments is that I pointed out a typographical error that was corrected.  There is no evidence supporting the John Williams claim to the Board that “The proposal you have was you know, does take those public feedback into account”.  The fact is that the recommendations of the two written comments were ignored.  This is typical for New York stakeholder outreach, the only thing that matters to State Agencies is the process because the answer is in the back of the book.  The Hochul Administration picked the projects and selected the Board members who approved them to further their objectives.  The Administration only pretends to care about public stakeholder input.

So why do I bother submitting comments.  In this instance the Hochul Administration is getting themselves out on thin ice.  Carbon dioxide emissions are directly tied to fossil-fuel combustion and energy production.  If State investments do not displace energy use at the RGGI electric generating units at the same time that RGGI allowance availability shrinks, the time may come when the only compliance option available is to not operate.  That is the reason that I argued that a change of emphasis for RGGI allowance proceeds to prioritize emission reduction efforts was appropriate.  I submit comments because if there is a problem in the future the politicians will not be able to say they were not warned.