Center Serves on Regional Greenhouse Gas Reduction Committee

In June 2007, the Delaware General Assembly passed Senate Concurrent Resolution No. 28, creating a committee to assist the Department of Natural Resources and Environmental Control in creating legislation authorizing and shaping Delaware’s participation in the Regional Greenhouse Gas Initiative (RGGI).  Delaware is one of ten Northeastern and Mid-Atlantic states and the District of Columbia which are signatories to the compact.  As a response to years of federal inaction on global warming, the compact states have established a modest regional cap and trade market for carbon emissions from power plants which will achieve 10% reductions by 2018.  The Center’s Executive Director, Michael D. Fiorentino, was invited to serve on the Committee by DNREC Secretary John Hughes.  The Committee included representatives of electric generating companies, municipal electric cooperatives, government officials, and environmentalists.  Our charge was to examine the issue of whether to allocate the total available carbon emission allowances to historical sources of those emissions in the state, to compel emitters to purchase the allowances by auction, some combination of the two, and the timing of the implementation.  A second issue to be examined was where to direct for public benefit purposes any auction proceeds which may result. 

The Committee met numerous times over the course of eight months to grapple with these contentious issues.  Advocating along with the Center for a full auction of the allowances was Nick DiPasquale of Delaware Audubon and Dr. Chad Tolman of the DE Chapter of the Sierra Club.   The Center and its allies also favored diverse public benefit utilization of the auction proceeds, including major efficiency retrofitting of homes for lower income families and seed funding for carbon reduction and renewable energy projects.   Although ultimately these proved to be minority positions, our strong stance resulted in a proposed bill containing a higher percentage auction than would have been achieved otherwise, with phase-in to 100%, and some concession toward carbon reduction projects for the proceeds. 

The RGGI bill passed the Delaware General Assembly in late June 2008, and has been signed into law by Governor Minner.  Delaware will participate in the first auction under RGGI, to be held in January 2009

Development of the Regulation

MAELC has also been asked to serve on the RGGI Regulatory Development Committee.  The body has met on several occasions to discuss the nuts and bolts of DNREC's implementation and management of RGGI.  The Center has taken a position in the Committee against a provision of the model rule which allows the exemption of electric generators that use the vast majority of their electric output to carry out production plant operations.  In Delaware, this means that the Valero Delaware City Refinery and its roughly one million or more tons of carbon emissions annually (15% of Delaware's total from the power sector) will not be included in the emissions inventory.  The result is that Valero will not have incentive to reduce carbon, since they will not need to pay for carbon allowances, and there will be no proceeds to be used for public benefit purposes such as energy efficiency and conservation programs.   The Committee has yet to make a final recommendation to DNREC to a proposed regulation.