Credits mean regional power plants pay for air pollution
2:31 PM Thu, Sep 25, 2008 | Permalink
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By PETER LORD Rhode Island today joined nine other Northeast and mid-Atlantic states in an unprecedented auction of the rights of local power plants to generate pollution. The auction is being called historic, but to the average electric customer, it should also be unnoticeable -- at least for awhile. The so-called Regional Greenhouse Gas Initiative is historic because it's the first to mandate that power producers must pay for the right to emit air pollution, in the form of carbon credits. Europe has carbon credits, but they were given away, creating a windfall for power companies. Here's how the program will work: Power producers will be audited periodically and will have to demonstrate they have purchased credits to cover the amount of carbon their plants emit. So dirtier plants will need more carbon credits or allowances, which they will have to pay for. The idea is that by monetizing the cost of the carbon, power plants will have an incentive to innovate and find ways to reduce emissions. Rhode Island power plants affected by the new program include: Manchester Street Station in Providence, owned by Dominion Resources; Ocean State Power in Burrillville, owned by TransCanada Power; Pawtucket Power Associates, owned by Sempra Energy Trading; Rhode Island State Energy in Johnston, owned by FPL Energy Operating Services; and Tiverton Power in Tiverton, owned by Calpine. Rhode Island, Connecticut, Maine, Maryland, Massachusetts, and Vermont are taking part in today's auction. Four states -- New Jersey, New York, New Hampshire and Delaware -- are expected to join in the next scheduled auction in December. A total of 14 auctions are scheduled during the next three years. The long-term goal of the so-called cap and trade emissions program is to lower emissions from 233 power plants between Maine and Maryland by 10 percent by 2019, and to use the proceeds from the auctions to help promote conservation among users of electricity.
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