NEW JERSEY TO KEEP $102 MILLION IN RGGI DIVORCE SETTLEMENT
In an written release, RGGI acknowledged its nine remaining states “will each recognize…all New Jersey…allowances in circulation,” plus the carbon dioxide permits to be sold in the next auction on June 8.
RGGI’s statement alleviates concerns that millions of existing New Jersey allowances might become worthless, which would have opened the door for permit purchasers to sue the state. Under the cap-and-trade scheme, utilities must obtain a permit for each ton of CO-2 released by their power plants.
The RGGI-New Jersey divorce could still get messy, as other complications lie ahead.
New Jersey plans to participate in the next three auctions scheduled for June 8, Sept. 7 and Dec. 7 before it pulls out of the program at the end of the year, according to a letter from Department of Environmental Protection Commissioner Bob Martin. NJDEP will continue to require electric generators in the state to have RGGI permits for CO-2 emissions through Dec. 31, 2011.
However, RGGI has not decided whether to honor New Jersey permits sold after this month’s auction.
“Additional information regarding other New Jersey allowances will be issued” before the September auction, according to RGGI. At next week’s auction, RGGI will also sell “future” allowances for use in 2014 – but New Jersey will be excluded from that offering.
New Jersey’s future with RGGI unravelled last week when Gov. Chris Christie announced that the state would be pulling out of the cap-and-trade program. Christie said the “gimmicky” program was an unnecessary tax on electricity and had failed to reduce CO-2 emissions.
Most of the $102 million New Jersey received from RGGI auctions has already been spent. Christie used more than $65 million of that money to help plug a deficit in the state’s current budget.