After two years of discussion, state officials, energy producers, environmentalists and consumer advocates are debating final details of a proposed cap-and-trade program that is expected to be finalized at the end of this month.
Maine and eight other northeastern states are on the brink of setting the nation's first limits on carbon dioxide pollution from power plants.
After two years of discussion, state officials, energy producers, environmentalists and consumer advocates are debating final details of a proposed cap-and-trade program that is expected to be finalized at the end of this month.
The plan -- called the Regional Greenhouse Gas Initiative, or "reggie" for short -- would freeze carbon dioxide pollution at current levels through 2015, then require a 10 percent reduction by 2020.
Power generators would have to use cleaner fuels or improve efficiency to stay within the caps, or pay other power plants to make the reductions for them.
"We very much support the concept," said Department of Environmental Protection Commissioner Dawn Gallagher. "We need to make sure Maine is treated fairly."
Gallagher said the pollution limits are projected to cost each household in Maine an additional $9 a year by 2015. But, she said, that is before accounting for efficiency gains, conservation incentives and rebates that the plan also would make possible.
Carbon dioxide is a byproduct of fossil fuel combustion and can cause global warming by trapping heat in the earth's atmosphere.
When the federal government rejected an international treaty to restrict power plant CO2 emissions, the northeastern governors decided to create regional rules. The proposal would put the states in step with Canada, Europe and other parts of the world and is being called an environmental rebellion by newspapers overseas.
Although only about one week from a vote on the plan, there are still intense negotiations that could reshape the scheme. Maine officials are meeting with various parties this morning in Augusta for feedback about the impacts here.
If the agreement is signed as expected, each state will adopt rules next year to begin implementation. Gallagher said she will take the plan to the Legislature for a full public review.
Maine has six power generating plants that would be subject to the rules. In southern Maine, they include Wyman Station in Yarmouth and Westbrook Energy Center in Westbrook.
"We've been cautiously optimistic," said John Flumerfelt, a spokesman for Calpine Energy, which owns Westbrook Energy and two other large Maine plants that turn natural gas into electricity.
Flumerfelt is worried, however, that the company may not get any credit for operating what are already clean and efficient plants, including the 3-year-old Westbrook facility. And he said the company objects to a provision that would allow the state to keep some of the carbon dioxide allowances and sell them to the power plants to raise money for energy-efficiency programs or ratepayer rebates.
That would just raise electricity rates, Flumerfelt said.
"At a minimum it's going to cost us a couple million dollars to go out and buy the allowances we will need to operate. We look at that piece of RGGI as a tax," he said.
Maine Public Advocate Steve Ward argues that the auction provision is a critical part of the plan and will actually keep costs down for customers.
"I've been seeing RGGI as an opportunity to greatly increase funding for energy efficiency," he said.
Environmental advocates support auctioning off the allowances. They also are pushing to tighten up parts of the plan that they say will delay or weaken pollution restrictions. Matthew Davis of Environment Maine said the proposal makes it too easy for states to avoid cutbacks by claiming credit for other environmental programs, such as planting or maintaining timberlands that take carbon dioxide out of the air. "It was the program's original stated intent to reduce greenhouse gas emissions from power plants specifically," he said.
Gallagher, the DEP commissioner, disagrees, saying that putting tree growth in the equation will reduce atmospheric carbon in the long run and promote sustainable forestry in Maine.
Despite the last minute questions and debates, advocates are hopeful the plan will become a model for the rest of the country.
According to Dan Sosland of Environment Northeast: "This could end up promoting economic development and clean energy in a low-cost way."
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Source: Knight Ridder/Tribune Business News
