For Immediate Release - December 09, 2013

Patrick Administration Issues Final RGGI Revisions to Dramatically Lower Greenhouse Gas Emissions from Power Plants

BOSTON – December 9, 2013 -  The Patrick Administration today issued final amendments to a regulation that will reduce up to 90 million tons of carbon dioxide emissions from power plants across nine New England and mid-Atlantic states during the next six years.

Massachusetts and eight other states – Connecticut, Delaware, Maine, Maryland, New Hampshire, New York, Rhode Island and Vermont – are part of the Regional Greenhouse Gas Initiative (RGGI), which is the nation’s first “cap-and-trade” program. Power plants in the RGGI states must purchase “allowances” that allow them to emit carbon dioxide. The states auction off these allowances and use the proceeds for public purposes, especially investments in energy efficiency, which create jobs and keep energy spending local.

The revisions to the Commonwealth’s RGGI program, as well as similar changes in the other eight states, will lower the existing “cap” on power plant emissions in the RGGI states from the current level of 165 million tons per year to 91 million tons per year starting in 2014. The cap will then be lowered by 2.5 percent each year thereafter until 2020. This reduction will ensure that in 2020, power plant emissions from these nine states will be half of what they were in 2005, when RGGI was initiated.

The lower cap is also expected to generate an estimated $350 million in additional revenue for the Commonwealth by 2020.These revenues will be invested primarily in programs to improve energy efficiency in Massachusetts’ municipalities, businesses and residences, which will, in turn, reduce energy costs and lower carbon dioxide emissions.

“Massachusetts has benefitted greatly from our participation in the Regional Greenhouse Gas Initiative,” said Energy and Environmental Affairs Secretary Rick Sullivan. “The program has cut more than 10 million tons of pollutants from our air, invested more than $252 million in energy efficiency improvements and generated thousands of clean-tech jobs.”

Buoyed by the program’s success, the nine RGGI states have also called upon the U.S. Environmental Protection Agency to embrace regional cap-and-trade programs when it issues federal rules to cut carbon emissions from power plants.

“RGGI has been an unqualified success as the nation’s first market-based program to reduce carbon dioxide emissions from power plants, and these program revisions are a perfect match to President Obama’s climate change goals,” said Commissioner Kenneth Kimmell of the Massachusetts Department of Environmental Protection (MassDEP). “Massachusetts and our RGGI partners have created a model for states across the nation, and federal officials should consider it as an option for compliance with the upcoming national rules.”

“Massachusetts has invested RGGI proceeds wisely, with nation-leading results,” said Massachusetts Department of Energy Resources (DOER) Commissioner Mark Sylvia.“We have directed the vast majority into the Mass Save® energy efficiency programs, as well as Green Communities grants, providing billions in benefits to businesses, individuals and municipalities. We look forward to continued economic and environmental contributions from RGGI.”

While the price for allowances is expected to rise under the new cap, the revisions call for the establishment of a “cost containment reserve” that would stabilize allowance prices in unforeseen circumstances, such as a shortage of natural gas. The cost containment reserve would inject additional allowances into the marketplace if allowance prices reach certain triggers ($4 per ton in 2014, $6 in 2015, $8 in 2016 and $10 in 2017, rising by 2.5 percent, to account for inflation, each year thereafter).

Before making these revisions, the RGGI states conducted extensive modeling on the impacts of these changes on consumers. The modeling shows that the impacts of the reduced emissions cap will be very modest, less than one percent in consumer bills. The average Massachusetts residential customer’s monthly electric bill of $72 will rise by 39 cents; the average commercial customer’s monthly bill of $455 will rise by $3.89; and the average industrial customer’s monthly bill of $6,659 will rise by $83.

For more information about the RGGI program revisions for Massachusetts, turn here:

For more information about the nine-state Regional Greenhouse Gas Initiative and its cap-and-trade program, turn here: