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The Analysis Group just released their review of the effects of the Regional Greenhouse Gas Initiative (RGGI), and they give it an A+.  They claim greenhouse gas emissions are falling, the state economies are growing, and renewable energy is on the rise.  RGGI must be working, right?

Only if you grade on a curve.  When you check the math, you’ll find that RGGI has no impact on emissions, has had minimal impact on improving energy efficiency, and done very little to increase wind and solar power generation.

What RGGI has done is put upward pressure on electricity rates which, in turn, has driven energy intensive businesses out of the RGGI region—along with the good-paying jobs those businesses supply.  In New Hampshire, for example, the loss of these high-wage jobs has reduced real medium household income by almost $2,000 a year, while increasing electric rates.

How can the facts be so far from the Analysis Group’s reporting? Let’s check their assumptions.

RGGI works by forcing power plants to pay for emission allowances in quarterly auctions.  The one point we all agree on is the cost of those allowances gets passed on to electric distributors and then onto ratepayers.  Between 2015 and 2017, those auctions collected about $900 million dollars—once again, all from the pockets of customers.

In their report, the Analysis Group (a paid consultant for RGGI, Inc.) assumes $800 million of that money is invested in local economies where it is leveraged by indirect and induced affects into $1.4 billion of economic impact.  But they’re using gross figures, not net.  They don’t account for the economic impact of that $800 million if it had been saved or spent by the electric customers themselves.  If the $800 million had been dropped into the economy from the sky, their analysis would be accurate. But it didn’t. The money came directly from local businesses and consumers in RGGI states who would have spent, saved or invested it themselves, thereby adding to economic growth.

That net number, alleged RGGI growth minus the loss of economic activity from ratepayers and customers, is nowhere to be found.

The other assumption is the RGGI invested revenue more than offsets the costs leading to electric bill savings, thus justifying the $1.4 billion impact estimate.  They assume energy efficiency investments should lead to lower demand, and lower demand should result in lower electric prices.

The problem with this assumption is lower electric demand can actually lead to lower power plant operating efficiencies.  For example, coal-fired power plants pay a higher RGGI allowance because they release about twice as much carbon dioxide as natural gas for each unit of electricity produced. These power plants were designed to run almost all the time.  An analysis of power plants in two RGGI states shows operating hours fall as the plants are less competitive, the plants stop and start more often, and efficiency has fallen 16 percent The result is higher costs and emissions.

Furthermore, energy efficiency doesn’t show up in a state-by-state analysis of energy intensity.  Energy Intensity measures the amount of electricity needed to support a dollar’s worth of economic production.  Between 2007 and 2015, energy intensity only improved 9.6 percent in RGGI states. In comparable states outside the RGGI agreement but with similar energy policies, it improved by 11.5 percent.  Electric demand has fallen in RGGI states, but the reduction can be traced to lower industrial demand from companies that left the region, taking jobs and $30 billion of business revenue with them.  Similarly, the comparison states created twice the amount of new in-state wind and solar generation as the RGGI states.

Even if you assume that RGGI spending is the engine behind improved energy efficiency or expanded renewables, there’s still a math problem: Relatively little of the RGGI tax revenue has been spent on energy.   For example, the New Hampshire program spends only 25 percent of revenue on energy efficiency with the rest given as electric customer rebates.  Connecticut and New York have re-directed large sums to their general funds, and Delaware simply hasn’t spent most of the money.   It’s hard to credit progress to dollars still sitting in the bank.

The Analysis Group also stated the RGGI states saved a billion dollars in fuel purchases thanks to lower energy generation.  Unfortunately, while these states generated less energy, that doesn’t mean they used less.  Instead, their imports of out-of-region electricity doubled from 7 percent to 14 percent between 2007 and 2015.  And less energy generated also means less energy to sell. As a result, New Hampshire has lost about half a billion dollars of electricity exports to other New England states. That means lost revenue and lost jobs.

When I began my independent analysis, “A Review of the Regional Greenhouse Initiative’, published in the peer reviewed winter 2018 Cato Journal, I expected to find some emissions savings for RGGI states as compared to other, comparable states.  I expected the debate would be over how big those savings were and whether they would be worth the price of distorting the energy market.

Instead, I found essentially no emissions savings can be attributed to RGGI.

The RGGI emission reductions were duplicated in the comparison states—and across the US.  Emissions cuts have come primarily from lower coal use.  I found 70 percent of the emission savings came from coal’s inability to compete with lower cost natural gas.  The other 30 percent can be attributed to US Environmental Protection Agency regulations that required expensive pollution controls be added to coal-fired power plants.  It just wasn’t worth investing in older, smaller power plants and, as a result, emissions fell.

The RGGI program is being extended from 2020 to 2030 with another 30 percent emission reduction goal, and up to six times higher allowance cost planned.  New Hampshire already met the 2030 emissions goal in 2016.  The RGGI program hurts New Hampshire’s economy with lost business, lost high paying jobs, lost income, and lost tax revenue.  After a decade there is no apparent environmental benefit from RGGI, and there has been a minimal impact on energy efficiency, and wind power.

New Hampshire’s elected officials should consider the impact on local businesses and residents, already burdened by the 3rd highest energy costs in the US, and ask themselves if it’s time to issue RGGI a failing grade and get out.

As with the rest of the country, it appears New Hampshire is pretty divided on the Paris Climate Agreement. At the state level, Republicans are applauding President Donald Trump’s decision to pull the United States out of the global climate pact, while Democrats are hoping to use the issue as political ammo in next year’s elections. At the local level, a couple cities, colleges, and universities are figuring out how they can commit themselves to reducing carbon emissions to show the rest of the world that not everyone agrees with Trump.

That division was very apparent Thursday during one of the last full House sessions of the year. Several House Republicans staged a walkout after Rep. Lee Walker Oxenham, D-Plainfield, was granted the right to speak on the House floor about Republican Gov. Chris Sununu’s decision not to join the U.S. Climate Alliance, a group of 12 states and Puerto Rico that are committed to upholding the Paris climate deal.

NH Reps narrowly ok member to speak on Climate Change. GOP choose to walk out. Forced to return. pic.twitter.com/uhO10aNfX7

— Raymond Gagnon (@gagnon03743) June 8, 2017

The representatives that walked out were forced to return to their seats because House Speaker Shawn Jasper needed quorum in order finish the day’s business. In her speech, Oxenham mentioned Trump’s withdrawal from the Paris climate accord and Republicans let out a cheer. The New Hampshire Democratic Party was quick to criticize Republican members for their actions.

“Rather than hear their colleague on a key issue, Republicans decided to continue to plug their ears in ignorance on climate change,” said Ray Buckley, NHDP chairman, in a statement. “In doing so, they are standing with Governor Sununu and President Trump against the rest of the world. This Republican walkout is symbolic of their willful ignorance on basic science.”

Sununu stated last week that he “stands by” Trump’s decision to leave the Paris Climate Agreement and he said Monday that New Hampshire would not join the U.S. Climate Alliance.

“Not at this time, especially when we do not yet know its impact on our economy and environment,” he told the Concord Monitor.

That drew criticism from U.S. Sens. Maggie Hassan and Jeanne Shaheen, and U.S. Reps. Carol Shea-Porter and Annie Kuster — all four members of New Hampshire’s Democratic congressional delegation — who wrote a Wednesday letter to Sununu encouraging him to change his mind.

“Governor, we write in support of New Hampshire joining the U.S. Climate Alliance. It is vital that the Granite State continues to be a leader on climate change and clean energy,” they wrote. “Just as the United States’ withdrawal from the Paris Climate Accord cedes American global leadership, New Hampshire’s refusal to acknowledge the clear consensus on climate science will similarly damage our state’s reputation.”

New Hampshire already participates in a regional cap-and-trade pact with nine other states in the Northeast that works to reduce carbon emissions. Under the Regional Greenhouse Gas Initiative, fossil fuel power plants have to buy allowances for every ton of carbon dioxide they emit. Sununu has previously indicated he would be support withdrawing from RGGI, but only if other states also did it.

While lawmakers battle it out at the State House on climate change, several cities and universities in New Hampshire are reaffirming their commitment to reducing greenhouse gas emissions.

A national movement called “We Are Still In” has gained steam since Trump made his announcement last week. As of Monday, a total of 1,219 governors, mayors, businesses, investors, and colleges and universities across the country declared their intent to ensure the United States remains a global leader in the effort to combat climate change.

“In the absence of leadership from Washington, states, cities, colleges and universities, businesses and investors, representing a sizable percentage of the U.S. economy will pursue ambitious climate goals, working together to take forceful action and to ensure that the U.S. remains a global leader in reducing emissions,” the statement reads.

While no Granite State cities have signed on to that specific statement, two colleges have joined the cause — the University of New Hampshire and Southern New Hampshire University.

In a separate statement from the Mayors National Climate Action Agenda, 274 mayors committed to adopt, honor, and uphold the Paris Climate Agreement goals.

“We will continue to lead. We are increasing investments in renewable energy and energy efficiency. We will buy and create more demand for electric cars and trucks,” the statement reads. “We will increase our efforts to cut greenhouse gas emissions, create a clean energy economy, and stand for environmental justice

Nashua Mayor Jim Donchess and Portsmouth Mayor Jack Blalock have signed on to that statement, but not the one from “We Are Still In.”

In other communities in the Granite State, Durham officials held a Tuesday forum about the feasibility of scaling down the targets of the Paris agreement to a municipal level. The town of Hanover also voted in May to establish a goal of transitioning to 100 percent clean and renewable energy by 2050.

Dartmouth College President Phil Hanlon didn’t sign on to the “We Are Still In” statement, but he signed onto a similar letter with the presidents of 11 other leading research universities. That letter commits the universities to transition to low-carbon energy and enhance sustainability practices on their campuses.

In the letter released Monday, the presidents “reaffirm that commitment, which is consistent with the Paris Agreement and recognizes the concerted action that is needed at every level to slow, and ultimately prevent, the rise in the global average temperature and to facilitate the transition to a clean energy economy. Universities have a critical role to play in reducing our own greenhouse gas emissions, continuing to advance evidence-based understanding of the causes and effects of climate change on the environment, the economy and public health, and developing solutions.”

The other signatories include all the Ivy League institutions, except Princeton University, and also Duke University, Johns Hopkins University, Massachusetts Institute of Technology, and Stanford University.

Earlier this year, Dartmouth announced it would reduce greenhouse gas emissions from campus operations by 50 percent by 2025 and by 80 percent by 2050. They also pledged to transition their campus to renewable resources by 2025.

In its announcement, Dartmouth admitted that it had fallen behind some of its peer institutions on a number of sustainability fronts.

“Although Dartmouth has substantially reduced campus energy use and made other significant advances over the last decade, we lag our peer institutions with respect to commitments, actions, and reporting in the sustainability domain,” the college released in its sustainability report. “Our report recommends principles, standards, and commitments in the areas of energy, waste and materials, water, food, transportation, and landscape and ecology.”

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It’s New Hampshire Energy Week in the Granite State. Throughout the week, lawmakers and energy policy advocates discussed some of the challenges facing the state, solutions to solve these problems, and important pieces of legislation coming up in the next two years.

Under the Republican-controlled Legislature, it’s not exactly clear what energy policy issues the GOP leadership and Gov. Chris Sununu are going to prioritize, but there are some interesting bills that could come up for a vote during Sununu’s term.

Here are two controversial energy bills in front of the Legislature this session:

REPEALING RGGI

Rep. Michael Harrington, R-Strafford, is sponsoring House Bill 592, which would end New Hampshire’s participation in the Regional Greenhouse Gas Initiative (RGGI). RGGI is a cap-and-trade program where utilities pay for carbon dioxide emission allowances. This serves to control and reduce greenhouse gas emissions. The funds from these allowances are used for energy efficiency projects and ratepayer rebates.  Currently, eight other states in the Northeast participate in the program. New Jersey was also a member of RGGI, but pulled out of the program in 2011.

This bill has been opposed by pro-energy and environment groups like the NH Sierra Club and the New Hampshire Sustainable Energy Association (NHSEA).

“Repealing RGGI would be a mistake for New Hampshire in terms of our economy, our environment and our public health,” said Michelle McCarthy, campaign organizer of Environment New Hampshire, at a hearing on the bill in February in front of the House Science, Technology and Energy Committee.

Opponents of the bills point to an Abt Associates report that was released in January, which estimates that the state avoided $100 million in higher health care costs by reducing pollution. They claim that since RGGI’s inception in 2008, electricity prices have decreased in the participating states by 3.4 percent, while costs nationally have increased by 7.2 percent.

Supporters of pulling out of RGGI say New Hampshire still has some of the highest energy costs, especially for commercial and industrial companies. With high energy costs, businesses are looking to move or expand in other states.

“This is not rocket science, and companies like Sig Sauer are doing the math and realizing it’s cheaper to move jobs out of New Hampshire to cheaper-power states,” said Greg Moore, state director of American’s for Prosperity, at the hearing.

In December, Sig Sauer announced it was expanding its operations in Arkansas, and New Hampshire’s high electric rates was a motivating factor. The company is still retaining its offices in the Granite State, though, and it was announced this year that the company was awarded with a whopping $580 million, 10-year contract with the U.S. Army to manufacture its pistols.

A University of New Hampshire research study released Tuesday determined that New England does not need to increase energy use to continue to grow its economy.

“It is important to prevent further increases in the cost of energy and ideally to reduce the overall cost of electricity in New Hampshire, especially for customer groups adversely affected by the state’s relatively high electricity prices, including more intensive commercial and industrial users as well as low-income households that pay a greater portion of their income for energy,” the researchers noted.

Kate Epsen, a member of the NHSEA, said it’s time to quash the belief that just because of New Hampshire’s energy prices, businesses are leaving or not coming to the state.

“We hear a lot of clamor over these high rates, but the bottom line of the bills people receive is that they are the same or lower than the national averages,” she told NH Journal. “We need to weigh the risks versus rewards of a single, very large type of project or more energy efficient technologies that are more broad based and keep jobs and dollars in the state economy.”

Epsen alluded to the ever controversial Northern Pass project — the 192-mile proposed hydroelectric line from Canada to Deerfield. Proponents of the project says the power would reduce energy costs for residents and businesses, but opponents cite possible environmental issues from putting the lines underground to high towers ruining New Hampshire vistas and impacting tourism. The state’s Site Evaluation Committee (SEC) is expected to decide in the fall if the project will move forward or not.

However, Moore and supporters of RGGI agreed that perhaps the program shouldn’t be repealed, but could be made better to fit New Hampshire’s needs.

He said all the money collected should be rebated to customers, which could save homeowners $1.3 million a year and commercial and industrial customers could save $2 million.

Catherine Corkery, chapter director of the NH Sierra Club, said the program should be made better, not eliminated.

“The politically motivated repeal bills are putting the program at risk every year, making it unstable and difficult for users to rely on,” she said. “Repeated repeal threats exhaust resources and delay helping people.”

The bill has been retained in committee, meaning after working on the bill during the summer months, it could come up again for a vote in the next legislative session. A complicating factor to the debate is the federal Clean Power Plan (CPP), former President Barack Obama’s initiative to reduce carbon dioxide emissions. RGGI currently satisfies the federal requirements for the plan, yet President Donald Trump has pledged that he would dismantle CPP and could do so as early as next week.

Sununu indicated on the campaign trail that he would consider withdrawing from RGGI, but only if other states also left.

REPEALING ELECTRIC RENEWABLE PORTFOLIO STANDARD

House Bill 225 would repeal the state’s renewable portfolio standard (RPS), which would require 17 percent renewables to be used by the state’s utilities this year. Those renewable energy sources include wind turbines, hydroelectric dams, solar panels, and even biomass plants.

If a utility does not meet its quota for renewable energy, it must make payments to the renewable energy fund, which is then spent on grants and rebates for individuals and businesses working on renewable energy projects.

New Hampshire’s RPS sets annual targets for electricity providers, and they meet targets by earning renewable energy certificates (RECs) for selling renewable power to retail customers. They can also buy RECs from other providers to comply.

Supporters of a repeal say renewable energy is more expensive than other energy sources, so the RPS forces consumers to pay for more expensive electricity. When utilities do not buy enough renewable energy, they essentially pay to subsidize more renewable energy projects. Due to these subsidies, there is little incentive for renewable energy sources to lower their prices. The legislature has also used money from the renewable energy fund to pay for unrelated budget items in the past.

Supporters of the RPS argue the law is necessary to ensure the development of renewable energy. A shortage of natural gas in New England caused electricity rates to spike over the winter months, highlighting the need for more diverse and renewable energy sources. Grants from the renewable energy fund also contribute significantly to the North Country economy, for the biomass and forestry industries.

Rep. Bart Fromuth, R-Bedford, sponsored a similar bill in 2015, but the House tabled it. However, the bill with an amendment was passed by the House in a Thursday executive session.

The Citizens Count, NH’s Live Free or Die Alliance — a nonpartisan organization looking to give citizen’s a voice in their local government — conducted a Facebook survey of New Hampshire residents on their support for the bill in January.

Approximately 55 percent said they were opposed to repealing the RPS, compared to 45 percent who were in favor of repealing, the survey found.

Senate Majority Leader Jeb Bradley has been a leading voice of energy policy in New Hampshire. He said he understand the concern of high energy prices, but doesn’t believe the bills repealing RGGI and RPS will ultimately pass.

“When all is said and done, the current laws will largely stay in place,” he told the Associated Press. “What we need to do in New England is to site new sources of generation in a way that protects people’s property values and their rights. That is a tough needle to thread.”

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