The Business Council opposes A.6321/S.2764, which would dedicate all funds from the auction of emissions allowances associated with the Regional Greenhouse Gas Initiative (RGGI) for the purpose of supporting investments in energy efficiency, renewable power sources and carbon emission abatement technology such.
The Business Council and others have already raised concerns about the economic impact of RGGI. This cap and trade program places New York businesses and consumers at significant economic risk due to higher natural gas and electric power costs, no limits on costs of allowances, and no guarantees to ensure the availability of allowances to affected generating sources. This has the potential to lead to shutdown of existing emitting generating sources, relocation of businesses out of New York and a definite competitive advantage for all businesses located in non-RGGI states.
Given the high cost of electric power, and the impact of such costs on the state's economy, a significant portion of any proceeds from the sale or auction of allowances should be used to directly offset any cost impacts on power consumers. However, RGGI makes no provisions for rate offsets.
This bill proposes to limit the use of auction revenues for investments in energy efficiency, renewable power sources and carbon emission abatement technology. While these are laudable goals, this legislation should be geared toward helping affected businesses by mitigating the heavy costs born as a result of RGGI.
Given the significant investments already being made in energy efficiency and alternative energy in New York, we believe that the state should avoid using RGGI primarily as an additional source of revenues for such purposes.
For these reasons, The Business Council strongly opposes adoption of A.6321/S.2764.