In a recent op-ed published by NJ.com, NJBIA’s Ray Cantor says New Jersey can lower electricity costs by leaving the Regional Greenhouse Gas Initiative (RGGI), a multistate cap-and-trade program that limits carbon dioxide emissions through the purchase of emissions allowances.
Cantor, NJBIA’s Deputy Chief Government Affairs Officer, notes that when New Jersey rejoined RGGI in 2020, allowance prices were relatively low and that helped reduce emissions, but the program has become much more expensive as allowance prices have risen sharply.
“Today, New Jersey operates some of the most efficient power plants in the region, while neighboring states that do not participate in RGGI — including Pennsylvania, Ohio, and West Virginia — continue to rely on higher-emitting coal-fired generation,” Cantor wrote.
New Jersey's natural gas-fired power plants must pay for RGGI allowances, which function as a tax, while competing against power plants in neighboring non-RGGI states, he said. This puts New Jersey power generators at a competitive disadvantage, increases electricity production costs, and ultimately raises energy bills for New Jersey consumers.
Cantor proposed suspending New Jersey's participation in RGGI allowance auctions and replacing them with a flat $7-per-ton carbon fee on all in-state generators. The Legislature has previously identified $7 per ton as a threshold for reviewing RGGI, and a fixed fee would reduce costs and still generate revenue for New Jersey energy and environmental programs.
A study by Tabors, Caramanis, and Rudkevich found that adopting a $7-per-ton fee could reduce annual carbon emissions by 5 million tons, save New Jersey consumers $279 million on energy bills, and generate $135 million in state revenue by 2027, Cantor said.
The public and policymakers can learn more here on NJBIA’s website, which includes a form that can be sent electronically to the Sherrill administration, urging it to “Rethink RGGI.”
To read the entire NJ.com op-ed, go here.
