1st RGGI CO2 Auction Brings Clearing Price of $3.07

AAEA's price for allowances is $20.00 per ton at our Green Carbon Bank and Carbon Mercantile Exchange.

The states participating in the Regional Greenhouse Gas Initiative (RGGI) announced that all of the 12,565,387 allowances offered for sale on September 25, 2008 were sold at a clearing price of $ 3.07 per allowance. RGGI, Inc. reported that 59 participants from the energy, financial and environmental sectors took part in the first-in-the-nation auction, indicating a strong start in the first of many CO2 allowance auctions. The demand for the allowances appeared to have been very strong with a total of quantity of 51,761,000 allowances demanded which was four times available supply for this first auction. The $ 38,575,783 in proceeds produced from the auction will be distributed to Connecticut, Maine, Maryland, Massachusetts, Rhode Island and Vermont, the six RGGI states that offered allowances for sale during the first auction. The states are investing those funds in energy efficiency and renewable energy technologies, and programs to benefit energy consumers.

The RGGI auction was administered by World Energy Solutions, Inc (TSX: XWE), which operates online exchanges for energy and green commodities. World Energy Solutions concluded that the software executed the auction seamlessly, the process ran as expected and there were no issues that affected the ability of bidders to participate. The RGGI auction was overseen by RGGI, Inc.’s independent market monitor, Potomac Economics, a leader in the field of monitoring and competitive assessment of wholesale electricity markets in the U.S. Potomac Economics also serves as the Independent Market Monitor for the Midwest ISO and ERCOT, as the Independent Market Advisor for the New York ISO, and as the Independent Market Monitoring Unit for ISO New England. Any CO2 allowances purchased at the first auction can be used by a regulated facility for compliance in any of the RGGI states, even if that state did not offer allowances in the first auction.

The next allowance auction is set for December 17, 2008. These early auctions, combined with the others being held in the first compliance period, will ensure an ample opportunity for bidders to obtain the allowances they will need for compliance across the entire 10-state region. RGGI intends to hold quarterly auctions during the first RGGI three-year compliance period, which will be from January 1, 2009 to December 31, 2011.

Under the RGGI process, the then participating states will stabilize power sector CO2 emissions at the capped level through 2014. The cap will then be reduced by 2.5 percent in each of the four years 2015 through 2018, for a total reduction of 10 percent. The ten states participating in RGGI are Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New Hampshire, New York, Rhode Island and Vermont.
For more information about RGGI, turn to: http://www.rggi.org

First Auction of CO2 Emission Allowances in United States

At a bell-ringing ceremony held today at the New York Mercantile Exchange in lower Manhattan, the Regional Greenhouse Gas Initiative (RGGI) marked the opening of the first-in-the-nation auction for carbon dioxide emission allowances. The ceremony, which was attended by Governor David A. Paterson of New York and Governor Jon S. Corzine of New Jersey, Ian A. Bowles, Secretary for Massachusetts Executive Office of Energy and Environmental Affairs, Laurie Burt, Commissioner, Massachusetts Department of Environmental Protection, Robert Calendar, Vice President of the New York State Energy Research and Development Authority, Phil Guidice, Commissioner of Massachusetts Division of Energy Resources, Lisa Jackson, Commissioner, New Jersey Department of Environmental Protection, and Shari Wilson, Secretary, Maryland Department of Environmental Protection, served to mark the most serious effort yet in the United States to address climate change.

RGGI will reduce carbon dioxide (CO2) emissions through a mandatory, market-based cap-and-trade program. Under RGGI, the ten participating states will stabilize power sector carbon emissions at their capped level, and then reduce the cap by 10 percent at a rate of 2.5 percent each year between 2015 and 2018. As promised in the 2005 RGGI Memorandum of Understanding, all participating states plan to have implementing regulations in place by January 1, 2009. Revenues from the carbon allowance auctions will be invested by the participating states in energy efficiency programs, renewable energy stimulus efforts and other programs to benefit consumers.

The RGGI auction held today offered 12,565,387 allowances, including CO2 allowances issued by Connecticut, Maine, Maryland, Massachusetts, Rhode Island and Vermont. The CO2 allowances purchased at this auction can be used by a regulated facility for compliance in any of the RGGI states, even if that state did not offer allowances in this auction.

Other RGGI participating states will offer allowances for sale in future auctions as they complete their necessary rulemaking proceedings. A second auction is scheduled for December 2008, with all RGGI participating states expected to offer allowances for sale in the first 2009 auction. Future sales of CO2 allowances are planned through a steady offering of allowances in quarterly auctions. States have committed to offer for sale before the end of 2011 all of the allowances they are putting into the auctions for the first three-year compliance period. Regulated power companies must hold enough allowances to match their CO2 emissions for the first compliance period by March 1, 2012.

The RGGI states have retained a professional independent market monitor, Potomac Economics, to oversee auctions and subsequent market activity. The monitor will observe the conduct of the auction qualification process as well as the auction itself, and will report on whether the auction was conducted in accordance with the participating states’ regulations and the noticed auction procedures and whether the auction results represented a competitive outcome.

AAEA-NY To Seek Environmental Justice Fix at DEC

AAEA will be seeking a change in the Department of Environmental Conservation (DEC) Commissioner Policy 29, Environmental Justice and Permitting to enhance the policy. AAEA is being prevented from utilizing the provisions of the regulation because one sentence states:

"Any application for a permit received after the effective date of this policy will be subject to the provisions of this policy."

CP-29 was issued on March 19, 2003 and AAEA-NY is an intervenor on a permit that was initiated at an earlier date. Clearly, environmental justice issues pursuant to the state's policy should not be excluded because of the time of the submission of the permit. We understand that there should not be a burden on the permit applicant to retroactively analyze EJ issues, but stakeholders should not be precluded from utilizing the policy if they want to do so. Moreover, in cases where the permit applicant would want to include environmental justice as instituted by CP-29, the prospective permittee should be allowed to do so. The policy makes provision for such a change by stating:

"This policy may be subject to change at the discretion of DEC."

The DEC continues:

"... the DEC expects that the policy will be revised regularly to account for new information in the area of environmental justice and other issues encountered during the implementation of CP-29."

Moreover, in areas where there are potentially serious negative environmental consequences, provision should be made to include CP-29. The public, DEC and specific stakeholders have a vested interest in assuring that vulnerable populations receive every possible avenue to share their concerns. DEC also states in CP-29 that the policy is:

"To ensure meaningful and effective public participation, this policy requires applicants for permits covered by this policy to actively seek public participation throughout the permit review process. Applicants are encouraged to consider implementing the public participation plan components prior to application submission."

Our ultimate goal is the same as that stated by DEC in CP-29 under Procedure V, Section M, Decision and Findings Requirement:

"Consistent with existing regulations, any adverse environmental impact related to an action must be avoided or minimized to the greatest extent practicable."

We also need to revisit Part V, Procedure, A, Applicability, 2:

"This policy shall not apply to permit applications for minor modifications, except as provided above, nor to renewals, registrations or general permits."

CP-29 should apply to renewals that did not consider environmental justice in the original process if the permittee, DEC and a stakeholder all agree that it would not be overly burdensome to the permitee.

Earn Your MPA in Environmental Science & Policy

Workshop courses in the 12-month Master of Public Administration Program in Environmental Science and Policy at Columbia University develop students' professional skills and combine the university's hands-on approach to teaching public policy and administration with pioneering thinking about the environment and sustainable development. The workshop is part of the core curriculum in this innovative program. Students learn how to develop professional presentations and reports on environmental and sustainable development legislation. In previous years, students have advised clients such as the Mayor's Office of New York City, the UN, and the EPA Region II during the spring semester 6-point Workshop. For more information about our Workshops, please visit the program's Workshop archive page. Representatives from our office will be traveling throughout the country this fall to share more information about the program with prospective students and review the application process and upcoming deadlines. For a full list of scheduled trips.

The Early Decision application deadline is November 1st. The Regular Decision application (with fellowship consideration) deadline is January 15th and the final application deadline is February 15th. Interested students are welcome to contact our office at Columbia University to speak with the program's coordinator, Audrey Lapiner, directly at 212-854-3142 or via email at. For more information about our program, please visit our website. Contact: Columbia Univ. School of Int'l & Public Affairs, 420 West 118th Street, New York, NY 10027

In Memoriam: Robert J. Knox

Bob Knox was a friend and inspiration to AAEA as he was to many other institutions and people all over the country.

Robert J. Knox was a founding Deputy Director and former Acting Director of the U.S. Environmental Protection Agency's Office of Environmental Justice(OEJ). Mr. Knox was an engineer by training and he began his career in Region 4 as a manpower development specialist working on water related issues. He moved to Region 2 where he led manpower and training programs.

In the early 1980s he served as the Director of the Office of Civil Rights. Thereafter, he was the Hazardous Waste Ombudsman for OSWER. When the Office of Environmental Justice was formed in 1992, he served as the founding Deputy Office Director with Dr. Clarice Gaylord, then OEJ Director. Bob spent his last 12 years in EPA working on community engagement activities. Bob retired from EPA in December 2004. In his retirement, he began taking coursework toward a masters degree from Howard University's School of Divinity. He was also a former deacon at the Gethsemane Baptist Church.

Riverkeeper Worked To Exclude African American Environmentalist Association

In the ongoing battle to provide cleaner air to New Yorkers, Riverkeeper has worked, and we assume will continue to work, to exclude AAEA from participating in a state hearing considering this life and death issue. The basic issue pits Hudson River fish eggs against asthmatic children and elderly in Harlem and the South Bronx. Riverkeeper chooses protection of some fish eggs over asthmatic children in Harlem. AAEA chooses asthmatic children and elderly over protection of some fish eggs.

Fortunately, the New York State Department of Environmental Conservation (DEC) ruled, over the objections of Riverkeeper, that AAEA could participate in a pending environmental permit hearing. It is simply unconscionable to us that Riverkeeper and others would attempt to exclude the environmental justice issue relevant to this extremely important air quality issue. The official state record clearly shows Riverkeeper's attempt to get AAEA excluded from the process:

"Riverkeeper argued that the issues identified by the AAEA failed to particularize the criteria in question in the draft permit. According to Riverkeeper, the AAEA's offers of proof with respect to the issues proposed did not identify permit conditions and indicate why those conditions were not in conformance with applicable law and permitting standards. Riverkeeper argued further that the AAEA's arguments with respect to outages at the Stations were merely general concerns about impacts on an unspecified population, and Riverkeeper went on to assert that the impacts were not specified. Finally, Riverkeeper contended that environmental justice concerns fall more within the purview of SEQRA, and should be addressed in that process, rather than in the context of non-compliance with a SPDES permit requirement."

AAEA responded:

"In response, the AAEA argued that the Department's Environmental Justice policy specifically states that it is applicable to the permitting process, noting that allowing AAEA to participate would further the Department's goal of ensuring that the concerns of low income and minority communities are considered in permitting decisions. The AAEA maintained that even one outage day could result in health impacts...Shutdowns of 42 days could increase emissions from such plants by over 1.2 million tons during ozone season, including an increase in oxides of nitrogen. Moreover, the AAEA indicated that it is prepared to offer testimony to establish that the Department in fact failed to take environmental justice considerations into account in the process of arriving at the terms of the draft permit.

Fortunately, the DEC ruled:

"This issue is substantive because, based on the AAEA's offer of proof, and upon this record, capacity may be limited by such installation. The issue is significant because, after hearing, the proposed draft permit may be modified to address air emission concerns... The NYSDEC Commissioner's Interim Decision upholding the Administrative Law Judge's February 3, 2006 Decision, which granted "standing" to AAEA for the adjudicatory hearing process in this atter. Accordingly, AAEA shall have full party status in this proceeding. In addressing this issue in the adjudicatory proceeding, generalized and nonspecific arguments will not be sufficient. AAEA should present evidence regarding air quality impacts on specific environmental justice communities, and should address the extent to which such impacts on those communities are disproportionate."

We thank the state for allowing us to provide evidence that urban children and elderly, the most highly impacted, will be negatively impacted if there is a negative ruling on the environmental justice issues that AAEA is defending at the upcoming hearing.

NRC Renews License of FitzPatrick Nuclear Power Plant

The Nuclear Regulatory Commission has renewed the operating license of the James A. FitzPatrick Nuclear Power Plant for an additional 20 years. The FitzPatrick plant, located 8 miles northeast of Oswego, N.Y., began commercial operations in 1975, and its operating license was set to expire in 2014. The licensee, Entergy Nuclear Operations, Inc., submitted its license renewal application Aug. 1, 2006. With the renewal, signed Sept. 8, the license is extended until Oct. 17, 2034.

On March 20, the Advisory Committee on Reactor Safeguards - an independent body of technical experts which advises the Commission - issued its recommendation that the operating license for FitzPatrick be renewed. That recommendation is contained in “Report on the Safety Aspects of the License Renewal Application for the James A. FitzPatrick Nuclear Power Plant.”

The FitzPatrick renewal brings the total number of operating license renewals to 49 reactor units. Renewal application.

Spanish Company MIGHT Develop Wind Power in New York

The Public Service Commission voted unanimously to allow Iberdrola S.A., a Spanish energy conglomerate, to acquire Energy East, a Maine-based utility with operations in five states.
Iberdrola has said it will invest at least $2 billion in wind turbines across upstate New York if the commission allowed it to acquire Energy East, subsidiaries of which supply electricity or natural gas to 1.7 million customers in the state. The commission’s decision was the final hurdle for the $4.6 billion deal, which had been approved by federal and other state regulators.

Opponents of the deal, including the Independent Power Producers of New York, a trade group of utilities, said they remained worried that Iberdrola would gain too much market power under the deal.

Under the terms of the deal, Iberdrola would be bound to invest $200 million in wind power. The company has promised to spend 10 times that amount, with plans for numerous wind parks spread throughout upstate New York. The plan would add about 133 megawatts of wind capacity to the state, if and when the wind turbines could be site approved and built, probably in at least ten years. This would provide enough power for 133,000 homes. The commission’s proposal also included a requirement that Iberdrola insulate its New York operations from any financial risks the company assumes in other states or abroad. Iberdrola would also have to divest Energy East’s fossil fuel generating plants, though it could retain the company’s hydroelectric power operations. (The New York Times, 9/4/08)

Energy Service Companies Offer Alternative Electricity

Alternative energy service companies (ESCOs) are offering to supply gas and electricity cheaper than large, established utility companies like Con Edison, which still delivers the power even if people sign with ESCOs. Part of the ESCO multilevel marketing business model is like Amway, people sell friends the natural gas or electricity service who then sell friends the service, with each seller getting a piece of the recruit’s spending in return. The approach is a byproduct of utility deregulation that began in the 1990's with broken-up utility monopolies now facing competition from companies such as Direct Energy Services, IDT Energy and Ambit. ESCOs are eager to capitalize on fears over high fuel prices and use mass mailings, Web sites and door-to-door salespeople to recruit customers from Con Ed by promising they will save 7 percent on their supply cost for the first two months, and avoid taxes on the delivery of that supply. Direct Energy estimates that customers in a typical New York City apartment can shave about $6.50 off their monthly electric bill. Companies offer perks, too. Energy Plus gives customers bonus miles on various airlines for every dollar they spend on electricity.

The network-marketing model is preferred by some companies, betting that people are more likely to buy electricity from someone they know than from a stranger at their door and that sales agents who earn residuals from those they enlist will be more motivated than those who work for a salary or straight commission. With some ESCOs, consultants pay $399 (plus $25 a month for a personalized Web site) and the initial $399 sign-up fee is recouped by signing up 30 new customers within 12 weeks. Each month, consultants get 5 cents to $5 for each customer, depending on when they signed up and their energy usage. There are bonuses for signing people up as consultants, and, as with so many network-marketers, free trips to Las Vegas or Atlantic City.

But ESCOs operating in New York have caught the attention of state regulators and consumer advocates, who say some sales representatives have inflated potential savings, misrepresented contracts and been overly aggressive with vulnerable constituencies like the elderly and nonnative English speakers. Some agents have been accused of exploiting the complex way gas and electricity is priced and the difficulty of deciphering which companies offer the best deals.
Con Edison estimates rates on each month’s bill and later reconciles them based on actual prices that fluctuate daily. ESCOs generally offer fixed-rate one- and two-year contracts, ignoring the volatile market; they also post average rates on Web sites like one from the State Public Service Commission, powertochooseny.com, potentially confusing people about their actual costs.

Since January 2007, the state’s Public Service Commission has received nearly 3,000 complaints about the 50-plus ESCOs operating in New York, In July, U.S. Energy Savings agreed to pay $200,000 in costs and penalties after customers complained to the state attorney general’s office about $600 termination fees they had to pay to cancel long-term contracts. Nationally, some ESCO customers have found themselves double-paying for power, when the some companies went out of business before the term of a prepaid contract was up, forcing them back to the big utilities. The Consumer Protection Board and New York City Department of Consumer Affairs have urged the Public Service Commission to make mandatory the voluntary guidelines that were developed by the ESCOs and the commission in 2006. (Thirty-one ESCOs in New York had signed on by March.)

Many customers should be very careful in considering the ESCO service because it can be a complex affair to calculate whether savings are really accomplished. Most people have a hard enough time just understanding their regular bill. According to Con Edison, savings are generally insignificant for residential customers, who use relatively little power.

Consultants earn money by getting people to sign up with a genuine gas and electricity provider, and by commissions on fuel and power purchases by customers, as well as by signing up new consultants. The service provides customers with a chance to save a few dollars on their electric bill. In one example one person recruited 10 people, who recruited enough people to build him a network of 1,030 customers. The person claimed to earn about $1,500 a month. Shell Energy Trading, a subsidiary of Royal Dutch Shell, sells energy to ESCOs. (The New York Times, 8/31/2008)