Friday, January 19

BOSTON — Gov. Deval Patrick, making good on a campaign pledge, signed an agreement yesterday committing Massachusetts to the nation's first multistate program to reduce emissions of greenhouse gases that contribute to global warming. Patrick also announced a new program intended to create energy savings for households and industry by auctioning off so-called "emission allowances" that electricity generators will need for each ton of carbon dioxide they emit under the pact.

"Climate change is one of the most pressing challenges of our time," Patrick said. "On this day, we want everyone to know that Massachusetts will not stand on the sidelines."

The Regional Greenhouse Gas Initiative is designed to curb carbon dioxide emissions from power plants by 10 percent by 2019. It has already been signed by governors from Connecticut, Delaware, Maine, New Hampshire, New Jersey, New York and Vermont.

Former Gov. Mitt Romney opted out of the Regional Greenhouse Gas Initiative in 2005, saying it could drive up energy costs for consumers.

Short-term vs. long-term

Patrick acknowledged that joining the pact could drive up electricity bills by $3 to $16 on the average household with an annual energy bill of $950.

"What's most important is that we be careful not to use short-term factors to defeat long-term objectives," he said.

Patrick, who worked for Texaco in the late 1990s, signed the initiative at an afternoon news conference with state Secretary of Environmental Affairs Ian Bowles at the University of Massachusetts-Boston.

The main goal of the bipartisan RGGI is to cut emissions of the greenhouse gases that contribute to global warming. As part of the program, the states are set to begin charging power plants fees for carbon dioxide emissions beginning in 2009.

As part of the agreement, states are given "allowances" for emissions. Electricity generators like power plants will need the allowances for each ton of carbon dioxide they emit. Each state has the discretion to distribute the allowances however it wants.

Patrick said Massachusetts will auction off all of the allowances and use the money — estimated at between $25 million to $125 million annually — to create a new program to encourage energy savings.

The money would go to pay for energy efficiency, demand reduction, renewable energy programs, and combined heat and power projects, which use what is normally wasted heat from power generation for efficient heating.

Incentives for customers

The funds will also be used to manage peak demand for electricity, lowering electric bills for consumers, Patrick said. Customers will have incentives to use technologies like automatic lighting and air conditioning controls that can help minimize peak-time usage.

"Changes in the electricity market are creating new economic incentives for large-scale energy efficiency initiatives and programs that cut electricity demand on peak days — the hottest days in the summer, when lots of us are using air conditioners," Bowles said.

Critics fear the plan could drastically increase electricity rates because it would force companies to build new plants, or convert plants to use natural gas. Others said they disagreed with the decision to auction off allowance.

"When you auction off the allowances, you end up with a large pot of money," said Bob Rio, a spokesman for Associated Industries of Massachusetts, which opposed the pact. "Our fear that the Legislature will start siphoning off the money."

The New England Power Generators Association, the largest association representing electric generating companies in New England, said it supported the decision to join the pact, but warned that auctioning allowances would cost jobs and drive up electricity rates.

But environmental activists said that without the plan and the new fees for power plants, the state would never meet its carbon dioxide reduction goals.

"What a breath of fresh air from our previous governor, who walked away from the climate crisis altogether," said Cindy Luppi of Clean Water Action.

Romney spokesman Eric Fehrnstrom defended the former Republican governor's decision not to join the pact and predicted the agreement would "lead to unacceptably higher electricity prices for consumers and put our businesses at a competitive disadvantage."

Patrick also announced that Massachusetts would begin buying renewable electricity for state agencies.

Renewable energy

Patrick said the state Division of Energy Resources will seek proposals for the procurement of renewable electricity for five state agencies, including the departments of Environmental Protection, Conservation and Recreation, and Fish and Game, MassHighway and the Registry of Motor Vehicles.

The department represent approximately 15 percent of the electricity that will be used by the executive branch over the next 12 years, Patrick said.

Environmental activists have also urged Patrick to reject changes to the state's clean air regulations proposed by Romney last year.

Those changes would let owners of the filthiest power plants buy their way out of cleaning up their smokestacks by paying into a greenhouse gas trust fund instead.

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