Vt. may move first on air pact
By LOUIS PORTER Vermont Press Bureau | February 17,2006
MONTPELIER — Vermont could be the first state to implement a new regional agreement restricting the pollution that contributes to global warming.
In December, nine Northeast states agreed to gradually slow the amount of carbon dioxide pollution from electricity power plants in the region. That will be done through a system of transferable credits that power generation companies can buy to increase carbon dioxide emissions from their plants.
But because the program is put in place through an agreement between the states, instead of by an act of Congress, each state has to pass its own legislation to ratify it.
The House Natural Resources and Energy Committee approved Vermont's version of the legislation Thursday in a unanimous vote. The bill will have to be approved by the full House and the Senate and be signed by the governor to become law.
Vermont is among the first states to begin working on such legislation, lawmakers said.
That bill, supported by the administration of Gov. James Douglas and utility officials, allocates most or all of the benefits of the Regional Greenhouse Gas Initiative (RGGI) to power customers instead of granting them to power generating utilities.
Perhaps other states will follow that lead, said Rep. Robert Dostis, D-Waterbury, chairman of the committee. That would mean the impact of Vermont's legislation could extend into the much broader energy market beyond its borders.
"If we can invest in renewable energy and in-state generation, then we will be meeting the goals of RGGI, to reduce overall greenhouse gas emissions," Dostis said.
Vermont is in a better position than many other states in the region because it already has very, very low carbon dioxide emissions, said Jeffrey Wennberg, Vermont's environmental commissioner and the state's main negotiator on the RGGI agreement.
Most of the state's power is produced by the Vermont Yankee nuclear plant or the Hydro-Quebec system. Neither contribute to carbon dioxide pollution in the region.
Indeed, only one power plant in Vermont, a peaking system in Berlin owned by Green Mountain Power, is counted as a greenhouse gas source. That twin-generator system, powered by jet fuel, only runs a few hundred hours a year when power demands are at their highest.
Under the RGGI "cap and trade" agreement, each state receives an allotment of "allowances" that entitle the utilities in the state to generating a certain amount of carbon dioxide pollution.
A strict formula — based on the amount of carbon dioxide pollution currently produced in each state — would have given Vermont very few, if any, credits.
But the final formula worked out in the multistate agreement also takes into consideration that contracts with Vermont Yankee and Hydro-Quebec end in about a decade and the state may have to buy "dirtier" power, so Vermont received more credits than expected.
The RGGI program is important in part because the states are filling in where the federal government has not taken charge, according to the Rev. Paul Bortz of Middlebury, who was in the Statehouse Thursday for "Citizen Action Day," a gathering of environmental and advocacy groups.
"To me it is one of the most exciting things that is happening," said Bortz, former minister of Unitarian Universalist Church of Rutland.
"The last 30 years is the hottest in the last 10,000," Bortz said. "The rapidity of it is just awful. People don't get the sense of urgency."
Vermont, although it has few emissions now, will get 1.3 million allowance units, which function something like currency. Each allowance will likely be worth $1.50 to $7, depending on the market.
Then, through legislation, each state decides how best to allocate its allowances. It can give them to polluting utilities, or allow them to be sold on the market and require that its utilities buy their own allowances.
Some states are considering giving utilities a share of the allowances, so they don't raise power rates to cover the cost of buying them. However, that will not provide as much benefit as investing the money from the allowances in renewable energy and efficiency programs, Dostis said.
That is what the Vermont program will do, if the proposed bill passes. The bill would give the Public Service Board authority to allocate the money from the sale of allowances.
Lobbyists for Central Vermont Public Service and Green Mountain Power said the utilities support the bill. Steve Kimbell, a lobbyist for Green Mountain Power, said the bill gives his company enough flexibility to ask the Public Service Board for allowances to cover emissions from the Berlin plant.
Contact Louis Porter at email@example.com.