Vermont § 255 - Regional coordination to reduce greenhouse gases

§ 255. Regional coordination to reduce greenhouse gases

• (a) Legislative findings. The General Assembly finds: (1) There is a growing scientific consensus that the increased anthropogenic emissions
  of greenhouse gases are enhancing the natural greenhouse effect, resulting in changes
  in the earth’s climate. (2) Climate change poses serious potential risks to human health and terrestrial and aquatic
  ecosystems globally, regionally, and in Vermont. (3) A carbon constraint on fossil fuel-fired electricity generation and the development
  of a CO2 allowance trading mechanism will create a strong incentive for the creation and deployment
  of more efficient fuel-burning technologies, renewable resources, and end-use efficiency
  resources and will lead to lower dependence on imported fossil fuels. (4) Absent federal action, a number of states are taking actions to work regionally to
  reduce power sector carbon emissions. (5) Vermont has joined with at least six other states to design the Regional Greenhouse
  Gas Initiative (RGGI), and, in 2005, Vermont’s Governor signed a memorandum of understanding
  (MOU) signaling Vermont’s intention to develop rules and programs to participate in
  RGGI. (6) It is crucial to manage Vermont’s implementation of RGGI and its consumption of fossil
  fuels for residential and commercial heating, and industrial processes, so as to maximize
  the State’s contribution to lowering carbon emissions while: (A) minimizing impacts on electric system reliability and unnecessary costs to Vermont
  energy consumers; and (B) minimizing the costs and the emissions resulting from the use of petroleum-based fuels
  for space heating and process heating for residential, commercial, and industrial
  purposes. (7) The accelerated deployment of low-cost process, thermal, and electrical energy efficiency,
  the strategic use of low- and zero-carbon generation, and the selective use of switching
  fuel sources are the best means to achieve these goals. (8) It is crucial that funds made available from operation of a regional carbon credits
  cap and trade system be devoted to the benefit of Vermont energy consumers through
  investments in a strategic portfolio of energy efficiency, weatherization, and low-carbon
  generation resources. (b) Cap and trade program creation. (1) The Agency of Natural Resources and the Public Utility Commission shall, through appropriate
  rules and orders, establish a carbon cap and trade program that will limit and then
  reduce the total carbon emissions released by major electric generating stations that
  provide electric power to Vermont utilities and end-use customers. (2) Vermont rules and orders establishing a carbon cap and trade program shall be designed
  so as to permit the holders of carbon credits to trade them in a regional market proposed
  to be established through the RGGI. (c) Allocation of tradable carbon credits. (1) The Secretary of Natural Resources, by rule, shall establish a set of annual carbon
  budgets for emissions associated with the electric power sector in Vermont that are
  consistent with the 2005 RGGI MOU, including any amendments to that MOU and any reduced
  carbon cap resulting from a subsequent program review by RGGI, and that are on a reciprocal
  basis with the other states participating in the RGGI process. (2) In order to provide the maximum long-term benefit to Vermont consumers, particularly
  benefits that will result from accelerated and sustained investments in energy efficiency
  and other low-cost, low-carbon power system, building envelope, and other investments,
  the Public Utility Commission, by rule or order, shall establish a process to allocate
  100 percent of the Vermont statewide budget of tradable power sector carbon credits
  to one or more trustees acting on behalf of consumers in accordance with the following
  principles. To the extent feasible, the allocation plan shall accomplish the following
  goals: (A) minimize windfall financial gains to power generators as a result of the operation
  of the cap and trade program, considering both the costs that generators may incur
  to participate in the program and any power revenue increases they are likely to receive
  as a result of changes in regional power markets; (B) employ an administrative structure that will enable program managers to perform any
  combination of holding, banking, and selling carbon credits in regional, national,
  and international carbon credit markets in a financially responsible and market-sensitive
  fashion, and provide funds to defray the reasonable costs of the program trustee or
  trustees and Vermont’s pro rata share of the costs of the RGGI regional organization; (C) optimize the revenues received from the management and sale of carbon credits for
  the benefit of Vermont energy consumers and the Vermont economy; (D) minimize any incentives from operation of the cap and trade program for Vermont utilities
  to increase the overall carbon emissions associated with serving their customers; (E) build upon existing regulatory and administrative structures and programs that lower
  power and heating costs, improve efficiency, and lower the State’s carbon profile
  while minimizing adverse impacts on electric system reliability and unnecessary costs
  to Vermont energy consumers, and minimizing the costs and the emissions resulting
  from the use of petroleum-based fuels for space heating and process heating for residential,
  commercial, and industrial purposes; (F) ensure that carbon credits allocated under this program and revenues associated with
  their sale remain public assets managed for the benefit of the State’s consumers,
  particularly benefits that will result from accelerated and sustained investments
  in energy efficiency and other low-cost, low-carbon power, or heating system or building
  envelope investments; and (G) where practicable, support efforts recommended by the Agency of Natural Resources
  or the Department of Public Service to stimulate or support investment in the development
  of innovative carbon emissions abatement technologies that have significant carbon
  reduction potential. (d) Appointment of consumer trustees. The Public Utility Commission, by rule, order, or competitive solicitation, may appoint
  one or more consumer trustees to receive, hold, bank, and sell tradable carbon credits
  created under this program. Trustees may include Vermont electric distribution utilities,
  the fiscal agent collecting and disbursing funds to support the statewide efficiency
  utility, or a financial institution or other entity with the expertise and financial
  resources to manage a portfolio of carbon credits for the long-term benefit of Vermont
  energy consumers. The net proceeds above costs from the sale of carbon credits shall
  be deposited into the Electric Efficiency Fund established under subdivision 209(d)(3) of this title. These funds shall be used by the entity or entities appointed under subdivision 209(d)(2)(B) of this title to help meet the building efficiency goals established under 10 V.S.A. § 581 by delivering heating and process-fuel energy efficiency services to Vermont consumers
  who use such fuel. (e) Reports. On or before January 15 of each year, commencing in 2007, the Department of Public
  Service in consultation with the Agency of Natural Resources and the Public Utility
  Commission shall provide to the House Committees on Commerce and Economic Development;
  on Environment and Energy; and on Natural Resources, Fish, and Wildlife and the Senate
  Committees on Finance and on Natural Resources and Energy a report detailing the implementation
  and operation of RGGI and the revenues collected and the expenditures made under this
  section, together with recommended principles to be followed in the allocation of
  funds. The provisions of 2 V.S.A. § 20(d) (expiration of required reports) shall not apply to the report to be made under this
  subsection. (f) State action offsets. The State’s negotiators to RGGI shall advocate for and negotiate to adjust the rules
  of the program, as needed, so that greenhouse gas reductions resulting from State
  investments and other public investments and investments required by State law will
  not be prohibited from being eligible for offsets under the program. (Added 2005, No. 123 (Adj. Sess.), § 1; amended 2007, No. 92 (Adj. Sess.), § 18; 2007, No. 209 (Adj. Sess.), § 13b; 2009, No. 54, § 105, eff. June 1, 2009; 2009, No. 1 (Sp. Sess.), § E.235.2, eff. June 2, 2009; 2011, No. 47, § 20c, eff. May 25, 2011; 2013, No. 50, § E.700; 2013, No. 89, § 4; 2013, No. 142 (Adj. Sess.), § 50; 2017, No. 113 (Adj. Sess.), § 173e.)