The Business Council opposes this legislation that would create new categories of spending for proceeds from the sale of CO2 emission allowances under the “regional greenhouse gas initiative.”
We have a number of concerns regarding this legislation:
We do not support the creation of new, permanent spending programs using RGGI proceeds, especially since there is no cap or limit on the price for CO2 allowances, or how much revenue can be raised under RGGI to feed state spending. As part of any RGGI spending plan, New York should follow the lead of at least three other RGGI states and adopt a “funding limit” – a per ton cap on the amount of RGGI proceeds that can go to state spending; any revenues above that amount should be dedicated to across the board rate relief. New York already suffers from electric power costs that are among the highest of any state, and state-imposed costs including RGGI, SBC, RPS and the recently increased Section 18-A assessment add nearly 15 percent to the cost of electric power in New York.
It ignores the detailed financial plan already developed by NYSERDA for use of RGGI proceeds. (see “Operating Plan for Investments in New York under the CO2 Budget Trading Program and the CO2 Allowance Auction Program,” April 16, 2009.) This Operating Plan sets forth a three year, $524 million spending plan. Apparently, S.5888 intends to create an alternative spending plan for these same resources. While not perfect, the final “Operating Plan” was developed with significant stakeholder input, and provides a fairly detailed plan to support industrial, commercial and residential projects. It includes cost/benefit assessments, and attempts to direct funds to spending categories with the best paybacks. In contrast, S.5888 creates new, broad categories of allowable spending; and provides little detail on the types of projects to be financed. We do not believe that S.5888 provides a better alternative to the NYSERDA “Operating Plan.”
We also question the proposed use of funds included in S.5888. For example, this bill would create another statutory job training program targeting so-called “green jobs.” We strongly question the need to devote RGGI proceeds to this purpose. New York is receiving $180 million from the Workforce Investment Act, all of which will go to job training, with New York already committed to a “green jobs” focus. In addition, New York is receiving another $175 million in formula-based aid from the federal ARRA fund, a portion of which will go to green job training. The Division of Housing and Community Renewal is receiving additional federal dollars, and has committed to developing a “comprehensive training program” for weatherization and other “green” jobs. For these reason, we do not support dedicating RGGI revenues to yet another state-funded job training program. (The Business Council also opposed inclusion of a $9 million job training commitment in the final NYSERDA RGGI operating plan.)
The Assembly version of this bill was introduced and passed with little opportunity for public input and comment. We believe this legislation has a number of shortcomings that would result in questionable use of RGGI funds.
For these reasons, The Business Council opposes adoption of S.5888.