CLIMATE CHANGE ROUNDUP: New Mexico is First in WCI on Cap & Trade

New Mexico is the first state in the Western Climate Initiative to adopt a carbon cap-and-trade program to cut greenhouse gases. By a 4-3 vote on November 2, the state’s Environmental Improvement Board adopted cap-and-trade program rules, which are set to create a carbon emissions trading market beginning in 2012. The program covers the 1,800 MW, coal-fired San Juan Generating Station, which supplies power to Southern California municipal utilities. New Mexico Governor Bill Richardson hailed the vote, calling it “the right thing to do.” Ron Curry, New Mexico Environmental Department secretary, stated the rules would help “promote the state’s clean energy economy.” A court challenge is likely. PNM Resources chief executive officer Pat Vincent stated the company plans “to evaluate all options, including legal.” PNM, the state’s major electric utility, opposed the rules and mounted an unsuccessful legal challenge earlier this year to block the state board from adopting them. PNM operates the San Juan plant. The rules cover 63 large industrial sources of emissions that emit about 24 million tons a year of greenhouse gases. The operators of those facilities are required to cut their emissions by 2 percent each year through 2020 beginning in 2012. The state’s rules are not expected to take effect until enough partners in the Western Climate Initiative adopt similar carbon cap-and-trade programs that cover a total of 100 million tons a year of emissions. That could happen next month when the California Air Resources Board is scheduled to consider approving a cap-and-trade program. In addition, three Canadian provinces that are part of the Western Climate Initiative--British Columbia, Ontario, and Quebec--are moving ahead on cap-and-trade. The Western Climate Initiative includes the states of Arizona, California, Montana, New Mexico, Oregon, Utah, and Washington, as well as the Canadian provinces of British Columbia, Manitoba, Ontario, and Quebec. * * * * * Energy costs will rise under the California Air Resources Board’s proposed carbon cap-and-trade program, according to an agency economic analysis. Energy efficiency investments are expected to blunt the increases. The analysis shows that for residential utility customers the price of electricity would rise 1 percent with carbon dioxide emission rights priced at $15/metric ton in a cap-and-trade market and up to 9 percent if the price of carbon hits $75/metric ton. The cost of natural gas for residential customers would increase 7 percent under a $15/metric ton price for carbon, but could go up 35 percent if the price of carbon hit $75/metric ton. Oil would go up by 5 percent at a carbon price of $15/metric ton and by 26 percent at $75/metric ton. The agency’s economic study notes that while the price of energy would rise, energy efficiency investments that cap-and-trade likely would trigger would hold down overall expenditures on energy for residential utility customers to an increase of no more than 0.7 percent if carbon traded at $75/metric ton. Industrial coal--used by power plants that supply California with electricity--would see the price of the mineral go up by 54 percent with carbon priced at $15/metric ton and rise 269 percent with carbon priced at $75/metric ton. Uinta Basin coal, which is mined on the Colorado Plateau to supply plants in Arizona, Utah, and New Mexico that produce power for California, sold for $41 a short ton on October 29, according to the Energy Information Administration. Based on the Air Board analysis, under cap-and-trade that likely would rise to anywhere between $63/short ton and $110/short ton. * * * * * The California Air Resources Board thinks a California Public Utilities Commission proposal to require automakers to put meters on electric vehicles to measure their draw on the grid would raise the cost and hamper the marketability of the cars. That would make it more difficult for the Air Board to achieve its greenhouse gas reduction and clean air goals. In correspondence to the CPUC late last month, Air Board mobile source control division chief Robert Cross explained that the agency’s low carbon fuel standard requires measurement of power used to charge up plug-in hybrid and full battery-powered electric vehicles to get greenhouse gas reduction credits beginning in 2015. The CPUC also wants to measure the electricity separately so it can create a different power rate for charging up vehicles. Utilities stand to get the greenhouse gas reduction credits created by electric vehicles. That’s why Cross maintained that the utilities should bear the cost of installing the meters, not automakers. In the end, however, electric car buyers may pay for the meters one way or another. CPUC administrative law judge Regina DeAngelis noted in a ruling late last month that Pacific Gas & Electric and Southern California Edison both currently charge car buyers for installing meters. On the other hand, San Diego Gas & Electric recovers the cost of meters from all of its ratepayers through general distribution charges. Since there are few electric cars now, the way utilities charge is moot. Besides that, it may change once the CPUC makes a decision in its proceeding about how to integrate electric vehicles into the grid. The commission is considering the related issues as automakers begin to roll out a new generation of electric vehicles, partly in response to California’s global warming requirements.

Over 11K Stories!

| Independently Powered Energy News

CLIMATE CHANGE ROUNDUP: New Mexico is First in WCI on Cap & Trade

vdharadmin

Related Posts

State Carbon Emissions Reduction Plan Update Faces Big Pushback

Bills Pass that Move the Needle on Non Fossil Energy Pass

California Falls Behind on Climate Protection

Governor-Elect Jerry Brown’s Cleantech Agenda