GREENHOUSE GAS AUCTION YIELDS $14.8 MILLION FOR ENERGY EFFICIENCY JOBS, INVESTMENTS
Governor Patrick launches $5 million initiative to revolutionize the energy efficiency industry through skills training, innovation
The bulk of the proceeds of the auction held Wednesday, December 17, will be allocated along the same lines as the funds generated by the first Regional Greenhouse Gas Initiative (RGGI) auction in September. The $13.3 million from that auction has already been deployed to support expanded energy efficiency programs operated by electric and natural gas utilities, heating system upgrades for low-income households, start-up of the Green Communities Division of the Department of Energy Resources, as well as vendor costs associated with participating in the allowance auction.
In addition to these priorities, the new auction money will fund an Energy Efficiency Skills and Innovation Initiative. This new initiative will facilitate the growth of an energy efficiency industry that is already expanding under the mandates and incentives of the Green Communities Act but lacks the capacity in organization, workforce, and scale to take advantage of all available opportunities to save consumers and businesses money.
Of the new RGGI funds, $5 million will be used to train energy auditors, insulation installers, and other energy efficiency technicians, as well as seed grants to support the development of innovative delivery models. Additional funds will be sought for this new initiative through the Clean Energy Center created by the Green Jobs Act signed earlier this year.
"We have an opportunity to both save money for consumers through energy efficiency and develop a vital new industry," said Governor Patrick. "Making our homes and businesses more energy efficient will create jobs assessing energy needs and installing insulation, lighting, and other efficiency measures."
The second auction of carbon dioxide emissions allowances by the Regional Greenhouse Gas Initiative (RGGI) was held on Wednesday. This morning RGGI Inc. announced that 31.5 million allowances were sold at a clearing price of $3.38 per allowance, up from $3.07 in the September auction and well above the reserve price of $1.86. The Massachusetts share of the allowance proceeds came to approximately $14.8 million, which is to be spent according to priorities set by the Green Communities Act.
The Green Communities Act, signed by Governor Patrick in July, allows RGGI auction proceeds to be used, without further appropriation, to fund the Green Communities program of incentives and assistance for municipalities to adopt energy efficiency and renewable energy measures; to support energy efficiency, conservation, and demand response programs; and to reimburse the Commonwealth for administrative costs associated with the cap-and-trade program. Governor Patrick has directed that the $14.8 million in proceeds from the most recent auction be allocated in the following ways:
- $2.4 million for 2008 utility-administered energy efficiency programs. Combined with the $3.5 million allocated for this purpose from September's first auction, these RGGI funds will fully cover the $5.9 million increase in spending approved by the Department of Public Utilities (DPU) for the state's electric and natural gas utilities to aggressively expand their energy efficiency programs this year to help consumers reduce their winter heating bills.
- $5 million for start-up of the Green Communities program. The Green Communities Act creates a Green Communities Division at the Department of Energy Resources (DOER) to provide grants and technical assistance to communities for efficiency and renewable energy efforts, funded by RGGI auction proceeds of up to $10 million per year. This allocation completes the first year funding to get the program up and running. DOER has hired Mark Sylvia, currently town manager in Plymouth, as director of the Green Communities Division, starting in February, and expects to launch the Division's grant program in early 2009. The new grant program will complement the $2.7 million of RGGI funds from the first auction committed to implementing energy efficiency measures in municipal buildings identified through DOER's Energy Audit Program.
- $2 million to replace outdated and inefficient heating systems for low-income households. These equipment upgrades will cut heating bills and emissions from these households by at least 15 percent. This allocation matches the $2 million devoted to this purpose from the first RGGI auction in September.
- $400,000 for administrative and vendor costs associated with Massachusetts's participation in the Regional Greenhouse Gas Initiative and its allowance auctions.
- $5 million for an Energy Efficiency Skills and Innovation Initiative. This new program will help to create a major new industry by funding job training for energy auditors and installers of insulation and other energy efficiency measures, as well as seed grants for innovative delivery models that will allow the energy efficiency industry to reach a new level of capacity and employment. The Governor directed Energy and Environmental Affairs Secretary Bowles to identify opportunities to provide additional funds for this initiative through the new Clean Energy Center.
"The utility programs and their current vendors are ramping up as fast as they can, but it's clear that we need to create a whole new industry," said Secretary Bowles. "If we are going to capture all energy efficiency opportunities that will save money year after year, and prepare for an expected infusion of federal funds for energy efficiency investments, we need more skilled workers, more companies, and new modes of delivery. Through this new initiative, the Commonwealth will jumpstart that process of business and job creation."
Wednesday's auction was the second to take place before the nation's first market-based, mandatory cap-and-trade program to reduce greenhouse gas emissions goes into effect in 2009. Massachusetts is one of 10 Northeast and Mid-Atlantic states that have committed to cap and then reduce the amount of carbon dioxide that power plants in their region are allowed to emit, limiting the region's total contribution to atmospheric greenhouse gas levels. After the 10 participating states have stabilized power sector carbon emissions at their capped level by 2014, the cap will be reduced each year from 2015 through 2018, resulting in a 10 percent reduction overall.
Future allowance auctions will take place quarterly. It is expected that further expansion of energy efficiency programs operated by electric and natural gas utilities for 2009, the plans for which are now before the Department of Public Utilities, will be fully funded by RGGI auction proceeds and other available funds.
The Commonwealth is represented on the governing board of RGGI by Department of Environmental Protection Commissioner Laurie Burt and Department of Energy Resources Commissioner Philip Giudice.