New Hampshire House Votes to Withdraw From Regional Carbon Trading Market

New Hampshire’s House of Representatives voted today to pull the state out of a regional program to cut carbon dioxide emissions in the Northeast.

The repeal of the Regional Greenhouse Gas Initiative, or RGGI, through House Bill 519 passed by a vote of 251 to 108 and will now be sent to the state Senate.

Opponents of RGGI say the 10-state program burdens businesses that are forced to pay higher electricity bills, and that repealing it may help local economies.

“Businesses are sick of the mandates and electricity prices going up, and may say ‘I have the opportunity to move to a Southern state, so I’m going to do it,’” Representative James Garrity, chairman of the House Science, Technology and Energy Committee, said in an interview today. “That’s what we’ve been hearing not only on RGGI but on any energy or climate legislation that results in higher rates to subsidize good causes.”

RGGI requires operators of power plants to buy permits, called allowances, to account for carbon dioxide released from smokestacks. The allowances can be bought and sold in a secondary market.

Power companies pass on these expenses and Garrity estimated that customers of Public Service of New Hampshire, a unit of Northeast Utilities (NU) and the state’s largest utility, would be paying at least $8 million a year to fund the initiative by 2012.

“The people who really get hurt in this are the industrial and commercial customers,” said Garrity, a Republican.

More State Opposition

Other states may also withdraw from RGGI. New Jersey’s Republican Governor Chris Christie said March 24 that he is re- evaluating his state’s commitment to the program.

“States inclined to pull out of RGGI are motivated not out of a need for alternatives but for less regulation,” Thomas Marcello, senior analyst at Bloomberg New Energy Finance in New York, said today in an interview.

“Repealing RGGI puts more money in the pockets of New Hampshire citizens through lower electric bills,” House Speaker William O’Brien, a Republican, said today in a statement.

The bill is opposed by New Hampshire Governor John Lynch, a Democrat who has said that exiting RGGI would deprive the state of $12 million a year in carbon-allowance sales. The funds help consumers and businesses “reduce their electric use and costs,” Lynch said in a Feb. 10 letter to lawmakers. A spokesman for Lynch reiterated today the governor’s opposition to the bill.

Republicans hold more than two-thirds of the seats in New Hampshire’s House and Senate, giving them enough votes to override a potential veto from Lynch.

To contact the reporter on this story: Ehren Goossens in New York at egoossens1@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net