DEEP: Regional Greenhouse Gas Initiative (RGGI)

Regional Greenhouse Gas Initiative (RGGI)

RGGI is a cooperative effort by Northeastern and Mid-Atlantic states to reduce carbon dioxide (CO2) emissions - a greenhouse gas that causes global warming. To help address climate change, the RGGI states operate the nationís first multi-state, market based, CO2 cap and trade program applicable to the electricity generating sector.  Under the program fossil fuel fired electricity generators must hold 1 carbon dioxide allowance for each ton of CO2 emissions at the end of each compliance period.  Each state has a budget of allowances.  The combined budgets, comprise a regional cap on allowances available to generators within the region. 

The States auction the allowances periodically and invest the majority of the proceeds from the auctions in consumer benefit programs such as energy efficiency initiatives, renewable energy deployment initiatives, direct greenhouse gas emissions reductions strategies, and bill assistance for low-income rate payers. 

In Connecticut, nearly 70% of proceeds from the auctions are invested in energy efficiency programs administered by the electric distribution companies and municipal electric utilities. 23% of proceeds from the auctions are invested in the deployment of Class I renewable resources. 

Between the inception of RGGI in 2008 and the close of 2013, Connecticut has realized and invested more than $98 Million of proceeds from allowance auctions in energy efficiency and renewable energy.  RGGI serves as a national model of a working, cost effective CO2 emissions control program that is fueled by the synergy of cap and trade and direct investment in technology and initiatives to further reduce power sector CO2 emissions.

Applicable Regulations

In December 2013, Connecticut and the other RGGI states enacted substantive changes to strengthen RGGI and build on the more than 40% reduction in CO2 emissions from the power sector that occurred between 2005 and 2012.  Each state committed to reducing is annual budgets of allowances to be consistent with recent emissions and to account for the surplus of banked allowances that accumulated over time due to the rapid decline in emissions.  The specifics of Connecticutís regulatory process to amend its RGGI related regulations, Section 22a-174-31 of the Regulations of Connecticut State Agencies, entitled Control of Carbon Dioxide Emissions; are detailed in sections below.

Pursuant to subparagraph 22a-174-31(f)(2)(F) of the Regulations of Connecticut State Agencies (RCSA), the Commissioner shall publish Connecticutís Adjusted Base Budgets for 2014-2020 on the Departmentís website.  The Adjusted Base Budget for each year represents the maximum amount of allowances CT may offer for auction each year.  In accordance with Subsection 22a-174-31(f)(2)(F) of the RCSA, Connecticutís 2014 -2020 Adjusted Base Budgets are:

 
Year
 Adjusted Base Budget
2014
5,359,926.00
2015
4,325,735.00
2016
4,182,120.00
2017
4,042,095.00
2018
3,905,571.00
2019
3,772,461.00
2020
3,642.677.00

The Adjusted Based Budgets were calculated in accordance with Subparagraphs 22a-174-31(f)(2)(B-E) of the RCSA.  These calculations rely upon the First and Second Control Period Adjustments, determined with the assistance of RGGI Inc.  Full details of the First and Second Control Period Adjustments can be found at:  www.rggi.org/docs/FCPIABA.pdf and www.rggi.org/docs/SCPIABA.pdf , respectively.

Revisions to RCSA Section 22a-174-31, proposed July 2013

Connecticut proposed this amendment of Section 22a-174-31 of the RCSA based on the outcome of a two year program review conducted in accordance with the RGGI Memorandum of Understanding between Connecticut and the eight other RGGI states.  The RGGI states agreed to reduce future regional CO2 allowance budgets and the statesí allocations under each budget to more closely align with current CO2 emissions within the region and drive continued reductions in CO2 emissions from the electricity generating sector.  Proceeds from the auction of allowances will continue to be invested in energy efficiency measures and the development of Class I renewable energy sources.

2008  RCSA Final Sections 22a-174-31 and 22a-174-31a (effective July 23, 2008)

CT RGGI Rules Proposed in January 2008

Sections 22a-174-31 (Section 31) and 22a-174-31(a) (Section 31a) were proposed in January 2008, to implement the Regional Greenhouse Gas Initiative (RGGI) in Connecticut.  Related documents on the LRRC approval process are available below:

 
Background

RGGI is a cooperative effort by Northeastern and Mid-Atlantic states to reduce carbon dioxide (CO2) emissions - a greenhouse gas that causes global warming. To help address climate change, the RGGI participating states developed a regional strategy for controlling emissions from large fossil fuel-fired power plants. Central to this initiative was the implementation of a multi-state cap-and-trade program with a market-based emissions trading system. The program requires electric power generators in participating states to reduce CO2 emissions.

Implementation of RGGI in Connecticut is an important part of the stateís overall Climate Change Action Plan. The RGGI process began in 2003, and the governors of seven states signed a memorandum of understanding (MOU) in December 2005. In August 2006, a final regional model rule was released, and a corrected RGGI model rule was released in January 2007. Individual states worked diligently to adapt the regional model rule to state-specific formatting, and state-specific policies were developed to fill in blank sections of the model rule. Some of the key issues for state determination included:

  • size of the consumer benefit set-aside;
  • uses for the revenues derived from the consumer benefit set-aside (e.g., what types of projects might be supported);
  • allowance allocation methodologies.

The regional RGGI process included a robust stakeholder process. The numerous materials related to the various outreach initiatives and comment opportunities are available at the main RGGI website. As part of CT DEEPís regulatory development process for the RGGI rule, a series of three CT workgroup meetings were held on:

Comments on the RGGI process in Connecticut were solicited prior to the January 2008 release of the proposed rules.  These comments are summarized below.

Links to the main RGGI website and state specific RGGI webpages 

Content Last Updated April 2014