As Court Reviews NJ's Repeal of Power Plant Rules, State Should Rejoin Regional Climate Change Program

This week, NRDC and our allies at Environment New Jersey will argue before a New Jersey appeals court that the Christie administration illegally rescinded rules that cut pollution from power plants as part of a multi-state effort called the Regional Greenhouse Gas Initiative (RGGI). 

RGGI is a nine-state program that has been reducing climate change pollution from East Coast power plants for the last five years, while at the same time supporting economic development, creating new jobs, and saving consumers money on energy. Designed by a bipartisan group of Northeastern and Mid-Atlantic governors in the mid-2000s, study after study demonstrates it has been working exactly as planned.

In court this week, we will be arguing that the state did not follow proper administrative procedure when, in 2011, it simply posted a statement on the Department of Environmental Protection’s website declaring an end to the rules requiring pollution reductions from power plants. Rather, according to New Jersey’s Administrative Procedure Act, the agency must give the public a chance to comment before taking such action. Had it done so, the state would have heard from the many businesses and residents who benefited from RGGI when the program was still in effect in New Jersey, and who see the program as a boon to the state’s burgeoning clean-energy economy.

RGGI and Forthcoming Federal Power Plant Rules

This upcoming court hearing also begs an important question: At this point in New Jersey’s and the nation’s history, why doesn’t the state—as one of the founding members of RGGI—reconsider its position and rejoin?

Consider the current context:

At long last, federal rules to cut carbon emissions from the nation’s existing power plants are finally in the works. As part of President Obama’s important climate plan, the Environmental Protection Agency will issue carbon pollution standards for existing power plants this June, and states will be required to develop proposals to meet those standards by 2016. If they don’t, the EPA will develop a plan for them. In all likelihood the EPA will consider RGGI to be an appropriate compliance mechanism.

That means that if New Jersey rejoins RGGI, it can meet the forthcoming federal regulatory requirements, while reaping all of RGGI’s benefits: consumer energy savings; new and much-needed jobs for the Garden State; and a reduction in the kind of pollution that turbocharges our weather, making extreme events like  like Hurricane Sandy more common.  Not a bad bargain, if you ask me.

In fact, in just its first few years, the program has proven itself to be a pollution-cutting, economy-boosting powerhouse.  Since RGGI took effect in January 2009, it has:

  • Helped reduce regional climate-change pollution by more than 30 percent;
  • Created more than 23,000 job-years (aka one year’s worth of work)—in the nine remaining RGGI states;
  • Added $2.4 billion in economic activity to the RGGI region;
  • Implemented energy-efficiency measures that will save ratepayers of all kinds—residential, business and industrial—at least $1.3 billion on their energy bills.

On top of that, RGGI allows each participating state to decide how best to use RGGI revenues to meet its needs. While the participating states use the majority of their RGGI funds to support energy efficiency, they do it in different ways.  In New York, for instance, homeowners can get free or low-cost energy assessments and low-interest loans to make their homes more energy efficient. Meanwhile, in New Hampshire, the state used a sizeable chunk of its RGGI funding to help small businesses afford energy upgrades that can keep them competitive in today’s economy.

Despite these advantages, when the New Jersey DEP pulled the state out of RGGI a few years ago it cited skepticism about the program’s effectiveness. In fairness, the program’s initial design did have one flaw (though it has since been fixed): State officials intended to cap the amount of pollution allowed under the original agreement at “existing levels” in January 2009, but they overestimated those projected “existing levels” and set the cap substantially above the actual pollution level. That meant the program—while still delivering a wealth of benefits—did less than it could have to decrease emissions and support the highly effective energy efficiency and renewable energy programs that it underwrites. Last year, the RGGI states fixed this, which means we can expect even greater benefits from now on.

So now let’s circle back: RGGI has proven to be so successful that the nine participating states have asked the EPA to allow them to use it as a compliance mechanism for its new carbon rules. And the EPA will likely do just as the nine RGGI states have asked.

When it comes to New Jersey, the court may also push the state in RGGI’s direction, if it finds that the DEP illegally rescinded the rules that implement the the program. But even without a court ruling in NRDC and Environment New Jersey’s favor, the state will still need to figure out how to comply with EPA power plant pollution standards. Will it rejoin the new-and-improved RGGI program, a program that allows the Garden State to tailor its emissions-reduction efforts to its particular needs? Will it develop a new plan from scratch? Or, will it choose the generic option crafted by EPA ?

We say: Why reinvent the wheel? With such a successful and innovative program on its borders, it’s just common sense for New Jersey to rejoin RGGI and reap the benefits its neighboring states currently enjoy. (The state legislature is likely to agree. Even without the upcoming EPA standards, New Jersey’s elected representatives have twice voted to require the state to rejoin the program. And efforts are now underway to amend the state constitution to make that happen.)

With long-overdue EPA power plant standards on the horizon, the lawsuit soon to be argued before the court, and support from the state legislature, Governor Christie and his administration should seize the moment and give RGGI another look.