SPONSOR:

Sen. Bunting

DELAWARE STATE SENATE

144th GENERAL ASSEMBLY

SENATE AMENDMENT NO. 3

TO

SENATE BILL NO. 263

AMEND Senate Bill No. 263 by striking lines 94 through 97 in their entireties, and by substituting in lieu thereof the following:

"Beginning with 2009 CO2 allowances, and thereafter, the Secretary shall auction 100% of allowances available to Delaware.".

FURTHER AMEND Senate Bill No. 263 by striking lines 48 through 53 in their entireties and by substituting in lieu thereof the following definition:

"(2) 'Public benefit purpose' means the promotion of supply-side and demand-side energy efficiency, demand-side energy conservation; the mitigation of electricity ratepayer impacts attributable to RGGI, with priority given to lower-income ratepayers; the implementation of distributed non-carbon-emitting energy technologies; development and implementation of firming and storage technologies for non-carbon-emitting intermittent generation for dispatchable power; and incentives for replacement of fossil generation with non-carbon-emitting and non-fossil-fuel burning energy technology.".

SYNOPSIS

Delaware joined the Regional Greenhouse Gas Initiative (RGGI) when Governor Minner signed a Memorandum of Understanding on December 20, 2005 (http://www.rggi.org/docs/mou_final_12_20_05.pdf).

"The Signatory States commit to propose for legislative and/or regulatory approval a CO2 Budget Trading Program ... aimed at stabilizing and then reducing CO2 emissions within the Signatory States ... that will regulate CO2 emissions from fossil fuel-fired electricity generating units ..."

"Each of the Signatory States commits to propose, for legislative and/or regulatory approval, the Program substantially as reflected in a Model Rule that will reflect the understandings and commitments of the states ..."

As noted in the "Overview of RGGI CO2 Budget Trading Program" (http://www.rggi.org/docs/program_summary_10_07.pdf):

"Under RGGI, instead of giving allowances directly to electric generators for free, states would sell a significant portion or all allowances through a regional auction or otherwise. RGGI takes this approach because in a competitive wholesale market electric generators pass through the market value of free allowances to the price they bid into the market. The RGGI program proposes to use this allowance value to provide incentives for end use energy efficiency and other measures, thus lowering the impact of the program on electricity consumers." (emphasis added)

In other words, to protect electricity ratepayers from rate impacts due to the RGGI, it is essential to secure payment for all allowances and use the resulting revenues to reduce electricity consumption.

The states presently belonging to the RGGI are Connecticut, Delaware, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Maryland. "NY, MA, VT, RI, CT, and ME have all publicly stated their commitment to auction 100%, or nearly 100%, of their allowances to support consumer benefit programs (CT, ME, RI, and VT have statutory requirements to this effect).

This amendment ensures that electric generators will pay for all of their allowances.

This amendment also refines the definition of "Public Benefit Purpose," including removing "funding of the administration of the Program" from the definition.

Author: Senator Bunting