Monday, January 11, 2010

NYSERDA Proposes to Revise Allocation of $301.6 Million RGGI Proceeds

NYSERDA is proposing to revise its plans for spending $301.6 million of the projected $446.4 million proceeds from the sale of greenhouse gas allowances the RGGI program through the period ending March 31, 2012.

The proposed new spending plan is based on a more conservative estimate of future RGGI auction revenue than the original plan adopted in April 2009, which had assumed receipt of $607 million through March 31, 2012, of which $525 million was proposed to be spent on various programs.

According to the revised plan, after five quarterly RGGI auctions of greenhouse gas allowances, NYSERDA had received $181 million and was holding it as of December 31, 2009.

The proposed plan
"incorporates a provision for using a nominal amount of money for programs NYSERDA is obligated to fund pursuant to a consent decree that resolves the legal challenge to the State’s Regional Greenhouse Gas Initiative program filed in January 2009 by Indeck Corinth, L.P."
The plaintiffs sued to challenge the RGGI program on the ground that it was created by the Governor and state agencies without any legislative authority, which they contend was needed to require power producers to buy carbon allowances and to guide expenditure of the money received from the state agency auction. See Court Seeks Comment on Proposal to Use Con Ed Customer Money and RGGI Funds to Settle Lawsuit Claiming RGGI "Cap and Trade" Scheme is Illegal, PULP Network, Jan. 11, 2010.

The "nominal amount of money" from the RGGI funds which NYSERDA proposes in the revised plan to be spent in order satisfy the plaintiffs in the court case challenging legality of RGGI is $7,658,707.

The RGGI program adds to electricity costs paid by all consumers, exacerbating the hardship to lower income households. The RGGI auction revenue only partly offsets the amount of electric rate increases it causes. See See "Cap and Trade" Market System for CO2 Reduction Likely to Raise New York Electricity Prices, PULP Network, May 20, 2009; CO2 Cap and Trade Programs Inflate Electric Rates in Restructured States, PULP Network, March 13, 2009.

There is no mention in the revised NYSERDA plan of any specific allocation to benefit low-income residential customers. Other NYSERDA energy efficiency programs that ostensibly benefit residential and low-income customers
An informal advisory group will be meeting at the PSC Board Room in Albany on Wednesday, January 13, 2010 beginning at 9:45 A.M., to discuss NYSERDA's revised plans for spending the RGGI revenue. The NYSERDA website indicates the meeting will be webcast.

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