Dive Brief:
- As part of a review of the northeast's Regional Greenhouse Gas Initiative, generator NRG Energy has suggested states do not expand their participation in the compact as a way of complying with the federal government's Clean Power Plan, Bloomberg BNA reports.
- Despite the nine-member group's past successes in avoiding carbon emissions, NRG said it wants states to consider their own strategies and also suggested implementing a price-cap mechanism to protect RGGI participants "from exorbitant compliance prices."
- As Bloomberg BNA points out, NRG largely stood alone in its comments. Almost every other company filing comments supported the RGGI model, which so far gas avoided more than 1.3 million tons of CO2 emissions.
Dive Insight:
The Northeast's RGGI program is widely viewed as an example of what states can do when they band together to reduce carbon emissions. The nine states have so far have funded RGGI programs that have saved more than 1.8 million MWh and expect to produce almost $3 billion in savings.
But in comments filed as part of the initiative's ongoing review, NRG said it "does not recommend the expansion of RGGI." Instead, the generator said it would prefer to see independent state measures used as compliance options.
"For the duration before CPP implementation, NRG believes that expansion of states to participate within RGGI would not be beneficial unless it is on a voluntary basis and these new states align with ISO jurisdictions to assure each generator within the given ISO is subject to the same requirements to eliminate disparity among generators," NRG said.
In a followup with Bloomberg BNA, NRG explained its position. Senior Vice President Steve Corneli said carbon reductions could be achieved with the least cost to consumers “through fleet-wide optimization that includes retiring or re-purposing the least economic of existing plants, rather than imposing a costly tax on all of them."
And while a mass-based trading scheme has caught the favor of most states and companies looking to band together to reduce carbon emissions, Consolidated Edison urged RGGI to also consider rate-based plans.
While it "generally support the use of a mass-based emissions target," ConEd said in its comments that "the option of shifting to a rate-based program after 2020 should not yet be removed from consideration given potential state and federal policies to encourage the electrification of the transportation sector."
UPDATE: On Jan. 20, NRG elaborated on its position with the following statement, delivered via email:
As states consider how best to implement EPA’s Clean Power Plan, NRG encourages them to consider state approaches that include measures to attract clean energy technologies, encourage and support the voluntary retirement or repowering of less economic fossil plants, and gradually evolve to “trading ready” state regimes. The Clean Power Plan allows and encourages states to incorporate these measures into their plans through what it calls a “state measures” approach, either alongside an active mass-based trading regime, or on a stand-alone basis with a trading regime as a backstop to be activated if needed. NRG believes many states can achieve all or part of the required emission reductions in this manner.
To keep energy costs low and ensure continued investment in clean energy, NRG encourages the RGGI states to consider incorporating the state measures approaches – such as voluntary retirement or repowering and additional investments in clean energy resources – as complementary approaches that work alongside a “trading ready” carbon market based on the current RGGI approach.
NRG encourages other states, without pre-existing carbon markets, to explore “stand alone” state measures plans to achieve the needed emission reductions at no cost during the CPP’s early compliance periods. In such cases, a “trading ready” mass-based market approach can be used as a backstop, should it be needed.