New Hampshire House Vote Could Impact Clean Power Plan Compliance
By Peter Ellis, Staff Contributor
The New Hampshire House of Representatives voted on Wednesday to remain a member of the Regional Greenhouse Gas Initiative (RGGI), but to reallocate 100% of the money raised through emission allowance auctions towards rebates for ratepayers. Any decision about RGGI participation or fund allocation could significantly impact how the state complies with upcoming EPA regulation under the Clean Air Act.
As originally introduced, HB 208 would have repealed the state’s RGGI program entirely, removing New Hampshire from the group of nine states that use a market-based approach to cap their collective CO2 emissions. The bill was referred to the House Science, Technology and Energy Committee, however, where it was amended to maintain participation in RGGI, but instead alter the distribution of funds raised in state emission auctions.
Currently, 80% of auction funds go towards ratepayer rebates, with the remaining 20% used to fund energy efficiency projects. The amended version of HB 208, however, allocates 100% of auction funds to ratepayers.
Any changes to New Hampshire’s RGGI program could have significant impacts on how the state chooses to comply with the Clean Power Plan, the EPA’s upcoming regulation under § 111(d) of the Clean Air Act. As initially proposed in June of last year, the Clean Power Plan requires states to submit implementation plans meeting either a rate-based or mass-based emission goal set by the agency. Notably, EPA’s proposal allows for both individual and multi-state plans. While it’s unclear whether New Hampshire and the other RGGI states would submit a single joint plan, the New Hampshire Department of Environmental Services made it clear in its comments to EPA that the current RGGI framework would ideally play a large role in achieving compliance. If the state were to repeal that framework, it would likely have to create an entirely new regulatory scheme as part of a viable implementation plan.
Even the defunding of New Hampshire’s energy efficiency programs, which the House did pass, could significantly impact Clean Power Plan compliance. The proposed regulation calculates state emission goals using four “Building Blocks” capturing the statutorily required “Best System of Emission Reduction.” Building Block #4 estimates that states can increase demand-side efficiency to an annual incremental savings rate of least 1.5 percent by 2020. While no state is required to utilize any or all of the Building Blocks EPA used in its goal calculation, New Hampshire would still face a tough road if it were to significantly cut its energy efficiency projects. Without utilizing efficiency for plan compliance, the state would likely have to place even stricter limits on power plant emissions or invest more heavily in renewable energy. Given that New Hampshire’s proposed rate-based goal is the fifth most stringent in the country, there may not be much leeway to disregard energy efficiency entirely.
The debate in New Hampshire may reflect a larger trend nationally, in which state legislatures are forced to reconcile their political agendas with regulatory compliance. Whether intentional or benign, state legislation making Clean Power Plan compliance more difficult will only serve to inflame the political and legal fight over the regulation in the years to come.