Does the public have a right to know who buys public permits?

For the controversial carbon cap-and-trade program, New Jersey authorities say no.  Now the state’s largest publicly-owned utility agrees the information should be kept secret from taxpayers and ratepayers.

PSEG Energy Resources & Trade has filed a motion to intervene in the lawsuit brought by investigative reporter Mark Lagerkvist against the state’s Department of Environmental Protection.

The giant utility, which boasts $12.4 billion in annual revenues, is asking Mercer County Superior Court to dismiss Lagerkvist’s suit and allow the information to remain confidential as trade secrets.

New Jersey and nine other states have sold $860 million in carbon dioxide permits through quarterly auctions administered by the Regional Greenhouse Gas Initiative.  RGGI is a mandatory cap-and-trade program that also covers New York, Connecticut, Massachusetts, Maine, Vermont, New Hampshire, Rhode Island, Delaware and Maryland

Under RGGI, utilities must obtain a permit for each ton of CO-2 their power plants release; they pass along that cost to consumers and businesses through higher rates. 

The system also allows utilities and outside investors to profiteer at ratepayer expense by speculating on permit prices.  Registered bidders at the auctions have included Goldman Sachs, Merrill Lynch, Morgan Stanley, JP Morgan, Barclays Bank and others.

Lagerkvist’s suit against NJDEP raises a number of crucial questions:

• Does the public have a right to know who buys public assets from state government?
• Are governments allowed to avoid disclosure and transparency by operating through non-profit corporations they create, govern and finance?
• Can governments circumvent open records laws by using private contractors as custodians of public documents and data?

To avoid disclosure, RGGI and NJDEP have been playing hide-and-seek with the records.

RGGI is a 501c3 non-profit corporation created, governed and financed by the 10 states.  RGGI received $2.5 million in public funds during 2008 and 2009.  Yet RGGI claims it is not a “public agency” subject to open records laws. 

NJDEP, a public agency, denied a state Open Public Records Act (OPRA) request for auction records.  The agency argues it does not “make, maintain or keep on file” any records of who purchases the permits it issues and regulates, therefore the documents are “not government records.”

The records exist in an electronic database called the Regional Greenhouse Gas Initiative Carbon Allowance Tracking System (RGGI COATS).  New Jersey and the other states paid nearly $550,000 in 2008 and 2009 for a RGGI subcontractor to create and maintain the database.

All 10 states have access to RGGI COATS, yet New Jersey authorities claim they do not have the records.  In response, Lagerkvist sued NJDEP.  

In an attempt to bolster the state’s case, two of Attorney General Paula Dow’s deputies wrote a signed letter to RGGI auction participants in March, inviting them to contact Judge Linda Feinberg to “address the court” about the possible release of “confidential” information.

PSEG got the message.  The utility is now asking the judge to allow it to intervene as a co-defendant in the case.

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Follow these links to previous New Jersey Watchdog reports on RGGI:

THE SECRETS TEN STATES & WALL STREET DON’T WANT YOU TO KNOW http://newjersey.watchdog.org/2010/07/28/cap-trade-scheme-is-clouded-in-secrecy/

NJ WATCHDOG SUES STATE OVER CARBON AUCTION “SECRETS” http://newjersey.watchdog.org/2010/09/06/1016/

WHY RGGI IS FAILING & UNLIKELY TO CUT CO-2 EMISSIONS BEFORE 2030 http://newjersey.watchdog.org/2010/11/17/why-rggi-may-fail-to-impact-co-2-emissions-for-20-years/

NJ WATCHDOG SUES STATE OF $777 MILLION OF AUCTION SECRETS http://newjersey.watchdog.org/2011/01/09/1620/

NEW YORK OFFICIALS RELEASE 2,000 RGGI EMAILS TO NJ WATCHDOG; NEW JERSEY STILL CLAIMS THE RECORDS ARE CONFIDENTIAL  http://newjersey.watchdog.org/2011/02/20/new-york-releases-2000-rggi-emails-new-jersey-still-claims-records-are-confidential/

NOT DEAD YET!  RGGI REBOUNDS WITH $83M CAP & TRADE AUCTION http://newjersey.watchdog.org/2011/03/11/1740/

DEMOCRAT BACKS NEW JERSEY BILL TO REPEAL RGGI CAP & TRADE  http://newjersey.watchdog.org/2011/04/20/democrat-suppo…rggi-cap-trade