Senate endorsement of House Bill 306 ascertains New Hampshire’s continued participation in RGGI by adopting proposed to RGGI Model Rule revisions.
On May 23, 2013, the New Hampshire Senate passed House Bill 306 by a vote of 14-10 to adopt the Regional Greenhouse Gas Initiative’s (RGGI) updated Model Rule and authorize the state’s continued participation in the multi-state initiative. The update, proposed on February 7, 2013, introduces revisions to RGGI’s cap-and-trade program to establish a more effective carbon market. Revisions are to take effect on January 1, 2014, requiring the nine member states to implement state-specific regulatory processes. New Hampshire and Maine are the only member states that require legislation to approve the update. The Senate action follows the House endorsement of HB 306 in March by a vote of 190-156.
RGGI, the nation’s first mandatory market-based emissions reduction initiative, aims to regulate power sector carbon emissions to attain a 10% reduction goal by 2018. Cap-and-trade and market-based emissions trading are key components of RGGI, which took effect on January 1, 2009. New Hampshire’s participation kicked off in June 2008 after the endorsement of HB 1434, which establishes the legislative approval for its RGGI membership. Among the major revisions, the updated Model Rule lowers the 2013 emissions cap by approximately 45% to 91 million tons from 165 million tons. The new cap would decline annually at the rate of 2.5% from 2015 through 2020 to reach a 17% reduction.
Carbon allowance prices are expected to increase with the tighter cap, implying higher costs for rate payers. However, New Hampshire passed HB 1490 in 2012, sending proceeds in excess of $1 per allowance sale back to rate payers in the form of rebates. The remainder goes to energy efficiency initiatives.