The Regional Greenhouse Gas Initiative (RGGI) is a cooperative effort by Northeastern and Mid-Atlantic states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont) to reduce carbon dioxide emissions – a greenhouse gas that contributes to global climate change. Central to this initiative is the implementation of a multi-state cap-and-trade program with a market-based emissions trading system. The proposed program requires certain electric power generators in participating states to purchase allowances for their CO2 emissions. To support the state CO2 Budget Trading Programs, the RGGI participating states have implemented a regional auction platform to sell CO2 allowances.
Vermont Participation in RGGI
Vermont committed to participate in RGGI when then Governor Douglas signed the RGGI Memorandum of Understanding with the governors of the other participating states. The Vermont Legislature then enacted statutory provisions to implement the RGGI program in Vermont. The Public Service Board (Board) has been tasked by statute, 30 V.S.A. § 255, to implement the auction provisions of the RGGI program. The Agency of Natural Resources (ANR) is also tasked by statute to participate in the RGGI program.
Under 30 V.S.A. § 255, the Board must establish a process to allocate the carbon credits that Vermont receives as part of its participation in the RGGI. The Board is also authorized to appoint a Trustee or Trustees to "receive, hold, bank, and sell tradeable carbon credits created under this program."
On July 18, 2008, the Board issued an Order for the implementation of the RGGI auction program, which included a model for a Trustee and procedures for disbursing auction proceeds. On August 19, 2009, the Board issued an Order for the implementation of the RGGI set-aside program, which included a process for retiring CO2 allowances in proportion to participation in voluntary renewable programs.
Pursuant to 30 V.S.A. § 255(d), Vermont's auction proceeds are deposited into the electric efficiency fund created under 30 V.S.A. § 209(d)(3). The state's Energy Efficiency Utilities combine the RGGI proceeds with other funding sources to offer a variety of services and incentives that result in improved building performance and heating system efficiency, thereby creating jobs, saving Vermonters money, and reducing Vermont's greenhouse gas emissions.
On February 7, 2013, the RGGI states released the results of a two-year comprehensive program review in the form of an updated RGGI Model Rule that incorporated recommended revisions to the RGGI program. The RGGI program revisions provide for a 45 percent reduction in the overall regional CO2 emissions cap.
On November 13, 2013, ANR amended the Vermont CO2 Budget Trading Program Regulations to reflect 2013 RGGI program revisions, including the reduction in regional emissions cap.
On April 2, 2014, the Board issued an Order making modifications and clarifications to the Vermont implementation of the RGGI program to reflect 2013 RGGI program revisions. With the exceptions of the modifications and clarifications, the April 2, 2014, Order adopts the previous requirements of the July 18, 2008, Order implementing the auction procedures and the August 19, 2009, Order implementing the set-aside program. Accordingly, the April 2, 2014, Order supersedes the July 1, 2008, and August 19, 2009, Orders.
On August 19, 2009, the Board issued an Order for the implementation of the Regional Greenhouse Gas Initiative set-aside program for voluntary renewable purchases:
On July 18, 2008, the Board issued an order for the implementation of the Regional Greenhouse Gas Initiative auction procedures and disbursement of auction proceeds: