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New Jersey releases draft regulations to rejoin RGGI

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After ongoing negotiations between New Jersey and officials from the Participating States of the Regional Greenhouse Gas Initiative (RGGI) over the course of 2018, on 17 December 2018, New Jersey’s Department of Environmental Protection (DEP) released its CO2 Budget Trading Rule Proposal establishing draft regulations for an emissions trading system in order to rejoin RGGI.

The initial emissions cap is set at 18 million short tonnes CO2e in 2020, which is below New Jersey’s estimated actual emissions of 20.6 million short tonnes. The cap will apply to 102 electric generating units at 36 power plants in New Jersey, who would participate in the RGGI allowance auctions starting in 2020.

The proposal’s overall design elements are largely consistent with those of the 2017 RGGI Model Rule as RGGI states confirmed. Main components include:

  • Cap: The emissions cap level, which will decline annually by three percent between 2020 and 2030;
  • Sector coverage: CO2 emissions coverage of the power sector only;
  • Reserves: New Jersey will also participate in the Emissions Containment Reserve (ECR) from 2021 and the Cost Containment Reserve (CCR);
  • Exemptions: Eligible biomass facilities and combined heat and power units that directly supply thermal energy and electricity to a co-located facility will be exempt from compliance obligations.

Furthermore, New Jersey’s Global Warming Solutions Fund Rule Proposal was released on the same date. It introduces the state’s Global Warming Solutions Fund, which establishes details on the distribution of the auction revenue raised under RGGI. New Jersey’s Economic Development Authority (EDA) would spend 60% of the revenue on offshore wind development, end-use energy efficiency or combined heat and power production projects. The state’s Board of Public Utilities (BPU) would spend 20% of the revenues on programs that reduce electricity demand and ratepayer costs for low- and moderate-income residents. The remaining 20% would be spent by the DEP on energy efficiency and renewable energy programs for local governments and on enhancing stewardship and restorations in tidal marshes and forests.

New Jersey’s proposed rules have entered a 60-day public comment period, which will end on 15 February 2019. A first public meeting will also be held on 25 January 2019. After further reviewing and incorporating the comments, New Jersey expects to adopt the proposed rules by May 2019.
USA - New Jersey
The state of New Jersey is seeking to rejoin the Regional Greenhouse Gas Initiative (RGGI), reversing its withdrawal from the program in 2012. On 29 January 2018, Governor Philip D. Murphy signed an Executive Order, directing the Commissioner of the Department of Environmental Protection and the President of the Board of Public Utilities to take all necessary regulatory and administrative steps to prepare the reentry into RGGI. The states anticipates participating in the first RGGI auction of 2020.
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