Known as RGGI, the initiative is a market-based approach to reduce greenhouse gas emissions in 10 Northeastern states. It is widely regarded as a potential model for a national program to reduce emissions of a gas tied to global warming.
The program works by requiring power plants that burn fossil fuels to purchase allowances for every ton of carbon dioxide they emit. Power plants that are more efficient than required can either bank their excess allowances for future use or sell them to plants exceeding their limits.
Maine will auction off 6 million allowances in the coming months, and 85 percent of the proceeds on the first $5 for each allowance is required to go to electricity conservation programs. ThatÂ’s because utilities are expected to pass the costs of complying with the program to ratepayers.
Stephen Diamond, chairman of the trust that is overseeing expenditure of MaineÂ’s RGGI proceeds, said he and the other trustees are still working on the rules governing how the money will be dispersed. But the trust approved emergency rules last week aimed at funneling some money into energy conservation programs as soon as possible.
Organizations or groups will have to submit proposals to the trust to receive funding from the $750,000 pool.
“As a practical matter, we are looking for programs that would have an impact this winter,” Diamond said.
Part of the trustÂ’s work over the next several months will be to build safeguards into the rules to ensure that all RGGI proceeds are used efficiently. Diamond said that accountability is important because ratepayers likely will foot the bill for the program.
“I’m confident that there will be standards and there will be monitoring,” he said.
The allowances auctioned off last month sold for $3.07 each, which was within expectations. Maine law governing the stateÂ’s participation in RGGI requires that the first $5 of every allowance goes toward energy efficiency measures. Any amount above the $5 threshold will go toward rebates for electricity ratepayers.