New Jersey is set to rejoin the Regional Greenhouse Gas Initiative, a cap-and-trade program for power plants in Mid-Atlantic and Northeast states.
New Jersey adopted on June 17 rules governing carbon dioxide trading and allocating revenue from RGGI’s quarterly allowance auctions.
RGGI uses a cap-and-trade approach to cut GHG emissions from power plants. The cap, set at 80.2 million tons this year, is set to fall by 3 percent a year for a decade starting next year.
The RGGI states are Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island and Vermont.
New Jersey was an original participant when the cap-and-trade program started in 2008. Then-New Jersey Gov. Chris Christie pulled the state out of RGGI in 2012.
New Jersey’s fossil-fueled generators must meet an 18-million-ton emissions cap when the state joins RGGI on Jan. 1 after releasing about 19 million tons of GHGs last year and in 2017.
Through RGGI and the state’s 50 percent-by-2030 renewable portfolio standard, the New Jersey Department of Environmental Protection expects that the state’s carbon emissions will be 11.3 million tons by 2030.
Natural gas-fired power plants produced almost 52 percent of the state's electricity last year, followed by nuclear power plants at 43 percent and renewable facilities at almost 5 percent, according to the New Jersey Board of Public Utilities’ draft "energy master plan,” released earlier this month. However, the 600-megawatt Oyster Creek nuclear plant retired in September, reducing the share of nuclear generation to about 32 percent.
Coal-fired generators accounted for 1.6 percent of the state's electricity. The state’s two coal-fired plants have power purchase agreements that run through 2024, according to the draft energy plan.
“While New Jersey has one of the cleanest electric generation portfolios in the country, resuming participation in RGGI provides the impetus for even further carbon dioxide reduction and is an important component of our comprehensive plan to address climate change,” said NJDEP Commissioner Catherine McCabe.
New Jersey’s renewable energy requirements, like its goal for 3,500 megawatts of offshore wind, will likely make it easy for the state to meet RGGI’s emissions caps, according to an analysis released earlier this year by M.J. Bradley & Associates, a consulting firm.
New Jersey will allocate 60 percent of its RGGI revenue to energy efficiency and renewable energy projects for commercial, institutional and industrial entities.
Twenty percent will go to reducing electric use and costs for low- and moderate-income customers while 10 percent will be distributed to local governments for energy-related projects and 10 percent will be used to sequester GHGs in forests and tidal marshes.
RGGI states have cut greenhouse gas emissions from power plants in half and raised $3.2 billion through its auctions.
In May, Virginia Gov. Ralph Northam declined to veto language in a state budget that restricted the state’s ability to participate in RGGI. The Department of Environmental Quality recently finalized a regulation to reduce carbon pollution from fossil fuel fired power plants by 30 percent over the next decade.
“While the General Assembly has restricted the Commonwealth from participating in RGGI, I am directing the Department of Environmental Quality to identify ways to implement the regulation and achieve our pollution reduction goals,” he said in a letter detailing his action on the budget.