Connecticut’s overdue budget is leaving some in the environmental community worried millions of dollars that are supposed to be reinvested into clean energy programs won’t be.
The gist, said Kerry Schlichting, a policy advocate at the Acadia Center, is that “with no budget resolution, these raids are still fully on the table,” she said.
Schlichting is talking about raids to money Connecticut gets from the Regional Greenhouse Gas Initiative, or RGGI, which amounts to millions of dollars acquired annually in dozens of auctions dating back nearly a decade.
But before we explain where that money could go, a quick cap-and-trade review.
RGGI works like this: states in the group auction off allowances, which you can think of as permissions to pollute. Dirtier power generators snag those allowances up and money from their sale is reinvested into clean energy programs.
Since its beginning, RGGI states have nearly halved carbon-sector emissions in the region. In Connecticut, more than $180 million has been sent back for reinvestment.
But lately, Connecticut’s finances have been a mess. And some legislators have eyed RGGI money as a way to plug budget holes.
In 2016, $3.3 million was swept from the program and put into the state’s general fund.
“It’s essentially like taxing ratepayers. It’s an energy tax,” said Katie Dykes, who heads up RGGI’s board of directors and is also chair of Public Utilities Regulatory Authority in Connecticut.
“So when legislators think about tapping these dollars, it’s important to remind them that these are not, sort of nice to have, consumer-benefit entitlement programs,” she said. They are doing work in the market -- they are functioning in the market just like the power plant down the street.”
Dykes said that’s because energy efficiency programs supported by RGGI drive down the need for power.
In theory, that drives down power plant demand -- and, by extension, your electric bill.
Schlichting agreed, but said there’s still a recent history of Connecticut looking to RGGI to fill budget gaps.
“The amounts that have been proposed to be swept into the general fund are much larger than we’ve seen in the past,” she said.
A budget proposal that passed the legislature last week proposes taking $10 million each year out of the program. Governor Malloy has said he’ll veto it.
If cuts are pursued in other budget proposals, RGGI’s Dykes said she’s hopeful pushback from the businesses -- and the grid operators -- currently benefiting from RGGI, would sour the political will to raid the money.
“We’ve demonstrated that one of the most cost-effective ways to meet our energy needs is to reduce the amount of energy that we’re consuming,” Dykes said. “If we start to see legislators tapping these types of dollars on a routine basis,it can challenge the cost effectiveness and the price of energy -- and also, the reliability of the grid.”
