Northeast Business Leaders Unite to Oppose Regional Greenhouse Gas Initiative Proposal.

BOSTON -- Concerned that a proposal by northeast state officials to control greenhouse gas emissions in the region will drive up electricity costs, The New England Council, leading an effort among the largest state business and industry organizations from the northeast, submitted a letter outlining their objections to the governors of the nine states affected by the plan.

The Regional Greenhouse Gas Initiative (RGGI) Proposal, crafted by a working group created by the northeast governors, was released in August for public review.

"The RGGI Proposal in its current form poses a significant risk of higher electric power prices by driving generators increasingly toward natural gas, imposing additional costs for the acquisition of carbon dioxide allowances, and driving additional capital costs for the upgrade of combustion units," said James T. Brett, president and CEO, The New England Council. "Reliable and reasonably-priced energy is key to the region's economic success and our ability to attract business and remain competitive. The RGGI region already has the highest average electric prices in the U.S., with New England at 52 percent above the national average and the mid-Atlantic region at 31 percent."

The letter was sent to the governors of each New England state as well as New York, New Jersey and Delaware. Leaders of the major chambers of commerce from each state signed on to the letter, including the Connecticut Business and Industry Association; Maine Chamber of Commerce; Associated Industries of Massachusetts; Business and Industry Association of New Hampshire; New Jersey Business and Industry Association; Business Council of New York State; Greater Providence Chamber of Commerce, and the Vermont Chamber of Commerce.

The RGGI Proposal establishes plans to cut greenhouse gases, such as carbon dioxide, which emanate from power plants and generators and contribute to the pollution which causes global warming. It would also create a market for pollution credits where power plants could purchase credits from cleaner plants to meet goals. The plan also proposes a region-wide emissions cap.

The governors' goal is to cap and reduce greenhouse gas emissions by 10 percent by 2020.

Brett said the disproportionately-high cost of electricity in the northeast is already having an adverse impact on the region's competitiveness.

In the letter, the Council also cited a 2004 study by Charles River Associates which found that a carbon dioxide control program with a cap as little as 10 percent below 1990 levels would lead to a 23 percent increase in electricity prices in the northeast by 2010.

The group suggested several changes to the RGGI proposal including: the proposal should not be effective in any one state until all of the other RGGI states have enacted it; there should be no limit on the use of offsets; a 'safety valve' mechanism is needed to control the price of credits; and the program should sunset when a national program is developed.

The New England Council and the nine chambers of commerce represent thousands of large and small companies from throughout the Northeast.

The New England Council is the nation's oldest regional business organization. An alliance of large and small companies, educational institutions, nonprofit and other agencies, the Council is dedicated to promoting federal public policies and regional initiatives which support economic development.