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Source: Hudson Valley Press

Green Groups Defend Nation's 1st Plan To Cut Global Warming

Posted: January 31, 2009
Originally Published: January 30, 2009

ALBANY - In response to a lawsuit filed yesterday by Indeck Energy of Buffalo Grove, IL, environmental and energy groups rallied to defend the 10-state Regional Greenhouse Gas Initiative (RGGI). The RGGI, which went into effect on January 1st, is the nation’s first enforceable program to reduce the pollution that is changing the climate.

The RGGI is a critical piece of the Northeast’s overall strategy to address climate change, which includes energy conservation and generating a greater portion of energy from clean, renewable sources. Late last year, New York cleared the way to participate in a December auction of carbon dioxide (CO2) pollution permits. The RGGI regulatory framework will hold CO2 emissions constant through 2014, and then gradually reduce those levels.

Among other claims, the lawsuit filed by Indeck Energy claims that RGGI provides no opportunity for power plants that entered into long-term contracts to recover costs. Indeck Energy owns and operates six power plants in New York and five additional facilities in other Northeast states. RGGI states include Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, Rhode Island, Vermont and New York .

Public records show that Indeck’s claims were addressed during a multi-year public comment process of finalizing RGGI regulations. New York State’s Department of Environmental Conservation created a 1.5 million ton set-aside for power plants that entered into long-term contracts to address generators’ concerns.

“At every step of the way for the Regional Greenhouse Gas Initiative, power plants have tried to slow down this process and this is one more example," said David Gahl, Environmental Advocates of New York. " New York State has responded to these concerns and now it's time to get with the program.”

“Power generators with long-term contracts bargained a price based on provisions of their contracts. It's not the state’s role to renegotiate contracts for power plants or utility companies when they don't like the results. Rather than coming after New York State, perhaps they should go after their legal teams for negotiating a contract that won’t benefit their interests,” said Luis G. Martínez, Energy Attorney, Natural Resources Defense Council.

“RGGI is the most important initiative in place in the United States today to limit carbon dioxide emissions from electric power plants, the largest source of global warming pollution in our country,” said Jim Tripp, general counsel for Environmental Defense Fund. “Whatever the merits of Indeck's contract dispute about its ability to pass through the cost of carbon dioxide allowances, there is no merit to its broad constitutional attacks on the RGGI program under the compact, due process and equal protection provisions of the U.S. Constitution. Contrary to Indeck's claims, the cost of carbon dioxide allowances it not a tax under NY State law, so we will vigorously defend the legal underpinnings of this critical program.”

“The RGGI is a critical tool in the fight against climate change, and the state should be commended for developing this important program. Any efforts to derail this historic process should be met with strong opposition,” said Sean Mahar Director of Government Relations, for Audubon New York .

“We have avoided responding to the realities of climate change for far too long,” said Carol E. Murphy of the Alliance for Clean Energy New York ( ACE NY ). “Under New York’s leadership, the northeast stepped up to the challenge and met it head on; all stakeholders should support the result of this collaborative effort and refrain from delaying tactics that threaten the future of our planet,” Murphy concluded.

“These are precisely the same complaints we heard from power plants when New York improved its acid rain control regulations in 2004 and again more recently when New York took action to protect the public from airborne mercury pollution,” said Brian L. Houseal, Executive Director of the Adirondack Council, a privately funded, not-for-profit organization dedicated to protecting the ecological health and wild beauty of the Adirondack Park. “They said they would go broke under the new rules and would move out of state. That was nonsense then and it is nonsense now. Power companies are doing just fine.”

“The short-sighted self-interest of a power generator cannot derail the most promising, collaborative effort to address the climate crisis,” said Adrienne Esposito, Executive Director for Citizens Campaign for the Environment. “Myopic corporate greed must take a backseat and instead be part of the climate crisis solution to protect our region’s people, coastlines, food production and overall economic health,” added Esposito.

"This is a frivolous lawsuit,” said Abigail Dillen, Earthjustice. “Indeck is just trying to secure special treatment at the expense of a program that is legally sound and also critically important in our fight against global warming.”

“RGGI is a crucial first step in addressing power plant carbon emissions that cause climate change—the most urgent threat of our time to the global environment, economy and life as we know it. A concerted effort to defend RGGI among the Northeast states is vital, even while we work for federal legislation and executive action to dramatically reduce the full range of greenhouse gas sources,” said Ned Sullivan, President, Scenic Hudson.

Susan Coakley, President of Northeast Energy Efficiency Partnerships (NEEP) states, “The importance of RGGI in fighting impending climate change through its cap and trade program and funding of critical energy efficiency programs cannot be understated. And in this uncertain economic era, the economic benefits from RGGI are exactly what the Northeast region needs.” NEEP is a non-profit company based in Lexington , Massachusetts .

“The RGGI auctions have been successful, and the process should not be derailed by this lawsuit,” said Jamie Van Nostrand, Executive Director of the Pace Energy and Climate Center . “The suit raises no new issues that weren’t addressed during the development of the RGGI auction process.”

Dr. Laurence DeWitt, President of The Commons, observed, “ New York has moved to a market system for electric generation—with strong support from merchant generators like Indeck. The auctioning of environmental allowances is totally consistent with such markets, creating a fair and economic sub-market for environmental permits. It is not the job of the public to hold harmless all generators when inherent risks cause them to lose in the market—unless consumers will also recover all extra profits from generators when they gain. That smacks of regulation all over again—implicitly that seems to be what Indeck is proposing.” The Commons is a consumer and environmental consulting group based in Albany , NY .

Shaun Chapman, East Coast Campaigns Director for the Vote Solar Initiative, says, “The alarm on climate change, and a clean economy has sounded and New York State residents have overwhelming demanded new energy solutions. We have worked with our neighbors for years to clean up the way our electricity demands are met and the RGGI process was and remains fair and open. When the alarm went off we’re sorry to hear the old power plants slept through it.”

The RGGI was designed to reduce greenhouse gas emissions from Northeast power plants. In addition to the direct cuts associated with implementing the program that begins in January 2009, auctioning emissions allowances under RGGI also provides revenue for programs that can further reduce pollution. Scientists say that without real reductions in climate change pollution, average temperatures in the Northeast could increase as much as 10 degrees by the end of the century. As a result, public health, infrastructure and coastal property, agriculture and water supply will be threatened.

The U.S. Supreme Court recognized the serious and well-recognized harms posed by climate change and reaffirmed states’ ability to protect their borders and residents by taking action to reduce global warming pollution in Massachusetts v EPA, decided in April 2007.