PETITION OF:

WHEREAS, the Commonwealth of Massachusetts was the first state in the region to enact regulations, at 310 CMR 7.29, which limit both the absolute carbon dioxide emissions to historic levels and limit the rate of carbon dioxide emissions from existing coal and oil fired power plants;

WHEREAS, the Commonwealth of Massachusetts recognizes that implementation of the existing 310 CMR 7.29 will achieve greenhouse gas reductions at the existing affected facilities of approximately 10%, which is ten years earlier than implementation of the Regional Greenhouse Gas Initiative (RGGI);

WHEREAS, the Commonwealth of Massachusetts; acknowledges that currently there are no commercially available back end controls to address CO2 at large fossil fired facilities;

WHEREAS, the Commonwealth of Massachusetts acknowledges that the cost to comply with the CO2 aspects of 310 CMR 7.29 are significantly less than if the affected facilities had to comply with RGGI and that most costs to electric generators eventually get passed onto consumers. CO2 or equivalent reductions are achieved by 310 CMR 7.29 in a more economically efficient manner than RGGI;

WHEREAS, the Commonwealth of Massachusetts acknowledges that facilities subject to 310 CMR 7.29 are vital to assuring both state and regional fuel diversity and electric system reliability;

WHEREAS, the Commonwealth of Massachusetts recognizes that fossil fuel fired units located in the Commonwealth greater than 25 MW are also a significant source of carbon dioxide emissions;

THEREFORE, be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. (a) For purposes of this section, the following words shall have the following meanings:

"Allowance" an authorization to emit a fixed amount of carbon dioxide.

"Cap and trade program" is a policy approach to controlling large amounts of emissions from a sector, such as electric generating stations. The approach first sets an overall cap, or maximum amount of emissions per compliance period, that will achieve the desired reductions in emissions. Authorizations to emit in the form of emission allowances are then allocated to electric generating stations, given to other entities or auctioned off. The total number of allowances cannot exceed the cap for a given compliance period. Individual control requirements, should they exist, are not specified for electric generating stations. The only requirements are that sources completely and accurately measure and report all emissions and then turn in the same number of allowances or offsets as actual emissions at the end of the compliance period.

"Regional Greenhouse Gas Initiative" or "RGGI", Memorandum of Understanding dated December 20, 2005, as may be amended, that established a cap and trade program within the northeast region of the United States.

(b) The department of environmental protection shall, in consultation with department of telecommunications and energy, through appropriate rules and regulations, establish a carbon dioxide cap and trade program that will limit and then reduce the total carbon dioxide emissions released by fossil fuel fired electric generating units, 25 MW or larger, that generate electric power in Massachusetts. The department of environmental protection's rules and regulations establishing a carbon dioxide cap and trade program shall be designed so as to fully comply with the Regional Greenhouse Gas Initiative (RGGI) and permit the holders of carbon allowances and carbon offsets to trade them in a regional market proposed to be established through the RGGI. The units already subject to the carbon dioxide requirements of 310 CMR 7.29 shall remain subject to said requirements and shall not be subject to RGGI. The units subject to the carbon dioxide requirements of 310 CMR 7.29 shall be allowed to use RGGI allowances or RGGI offsets to demonstrate compliance with the carbon dioxide requirements of 310 CMR 7.29.

(c) The department shall provide in those regulations that at least fifty percent of all allowances, issued under that program in the Commonwealth shall be sold by the Commonwealth through an auction open to all who wish to participate and all funds recovered from said auction shall be used for consumer benefit or strategic energy purposes, including the use of the allowances to promote energy efficiency, to directly mitigate electricity ratepayer impacts, to promote renewable or non-carbon emitting energy technologies, to stimulate or reward investment in the development of innovative carbon emission abatement technologies with significant carbon reduction potential. Any monies received by the Commonwealth as a result of such sale of allowances may be spent for the purposes specified in this section, or purposes specified in the RGGI, without further appropriation.

(d) The responsibilities hereunder shall be in addition to all other responsibilities imposed by any other general or special law or rule or regulation and shall not diminish or reduce any power or authority of the department of environmental protection including the authority to adopt standards and regulations necessary for the Commonwealth to join and fully participate in any multi-state program, at any stage in the development and implementation of such a program, intended to control emissions of carbon dioxide and/or other substances that are determined by the department of environmental protections to be damaging and/or altering the climate.