A4556

An Act concerning the reduction of greenhouse gas emissions, and supplementing Title 26 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. The Legislature finds and declares that New Jersey should implement cost-effective measures to reduce emissions of air contaminants, including greenhouse gases, and that emissions trading and the auction of allowances can be an effective mechanism.

The Legislature further finds and declares that any emissions trading program established in the State to reduce emissions of air contaminants should provide both incentives to reduce emissions of such contaminants at their sources and funding or other consumer benefit incentives to reduce the demand for energy, which in turn would reduce the generation and emission of air contaminants.

The Legislature further finds and declares that funding consumer benefit purposes will result in reduced costs to New Jersey consumers, decreased energy use, decreased greenhouse gas emissions, and substantial and tangible benefits to the energy-using business sector.

The Legislature therefore determines that it is in the public interest to establish a program that authorizes the State to dedicate 100 percent of the revenues derived from the auction or other sale of allowances pursuant to an emissions trading program to reduce emissions of greenhouse gases for consumer benefit purposes.

2. For the purpose of this act:

“Allowance” means a limited authorization, as defined by the department, to emit up to one ton of carbon dioxide or a specified amount of any greenhouse gas.

“Board” means the Board of Public Utilities.

“Consumer benefit” means any action or measure to: promote energy efficiency; directly mitigate electricity ratepayer impacts; promote renewable or non-carbon-emitting energy technologies; stimulate or reward investment in the development of innovative carbon emissions abatement technologies with significant carbon emissions reduction potential; fund programs that promote electricity end-use energy efficiency in the commercial, industrial, and institutional sectors; fund programs that reduce electricity demand in urban areas; and fund the administration of greenhouse gas emissions allowance trading and consumer benefit programs pursuant to this act.

“Department” means the Department of Environmental Protection.

“Fund” means the “Global Warming Consumer Benefit Fund” established pursuant to section 4 of this act.

“Greenhouse gas” means the same as the term is defined pursuant to section 3 of P.L.2007, c.112 (C.26:2C-39).

“Urban areas” means a city of the first class or a city of the second class as defined pursuant to section 1 of P.L.1979, c.181 (C.40A:6-4), an urban enterprise zone designated pursuant to the "New Jersey Urban Enterprise Zones Act," P.L.1983, c.303 (C.52:27H-60 et seq.), and an urban complex designated by the State Planning Commission pursuant to the “State Planning Act,” P.L.1985, c.398 (C.52:18A-196 et al.).

3. The department, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B 1 et seq.) or through other actions, may take any measures necessary to sell, exchange, retire, or otherwise convey, by auction or otherwise, any or all allowances that are created by, budgeted to, or otherwise obtained by the State in furtherance of any greenhouse gas emissions allowance trading program implemented to reduce or prevent greenhouse gas emissions. The department may exercise this authority in cooperation and coordination with other states or countries that are participating in regional, national or international greenhouse gas emissions trading programs with the same or similar purpose.

4. There is established in the Department of the Treasury a special, nonlapsing fund to be known as the “Global Warming Consumer Benefit Fund.” The fund shall be administered by the State Treasurer and shall be credited with:

a. moneys received as a result of any sale, exchange or other conveyance of allowances through a greenhouse gas emissions allowance trading program;

b. such moneys as are appropriated by the Legislature; and

c. any return on investment of moneys deposited in the fund.

5. a. Moneys in the “Global Warming Consumer Benefit Fund” established pursuant to section 4 of this act shall be used for the following purposes:

(1) 60 percent shall be provided to the New Jersey Economic Development Authority, to provide grants and other forms of financial assistance to commercial, industrial, and institutional entities to support end-use energy efficiency projects, including but not limited to energy efficiency and renewable energy applications and combined heat-and-power applications. The New Jersey Economic Development Authority, in consultation with the board and the department, shall determine: (a) the appropriate level of grants or other forms of financial assistance to be awarded to individual commercial, industrial, and institutional sectors and to individual projects within each of these sectors; (b) the evaluation criteria for selecting projects to be awarded grants or other forms of financial assistance; and (c) the process by which grants or other forms of financial assistance can be applied for and awarded;

(2) 30 percent shall be provided to the board to support programs that are designed to reduce electricity demand in the low-income and moderate-income residential sector with a focus in urban areas; and

(3) 10 percent shall be provided to the department to support programs designed to promote local government efforts to plan, develop and implement measures to reduce greenhouse gases through technical assistance to local governments, and the awarding of grants and other forms of assistance to local governments to conduct and implement energy efficiency, renewable energy and distributed energy programs and planning that result in measurable reductions in greenhouse gas emissions. For the purpose of conducting any financial assistance program pursuant to this paragraph, the department shall determine: (a) the appropriate level of grants or other forms of financial assistance to be awarded to local governments; (b) the evaluation criteria for selecting projects to be awarded grants or other forms of financial assistance; and (c) the process by which grants or other forms of financial assistance can be applied for and awarded.

b. The New Jersey Economic Development Authority, the board and the department may each use a portion of the apportionment of the moneys that agency annually receives from the fund pursuant to paragraphs (1), (2), and (3), respectively, of subsection a. of this section to cover costs incurred by each agency in administering the provisions of this act and in administering an emissions trading program to reduce emissions of greenhouse gases, provided that no agency may use more than four percent of the total amount annually deposited into the fund for this purpose.

6. This act shall take effect immediately.

STATEMENT

This bill would authorize the Department of Environmental Protection to sell, by auction or otherwise, allowances from greenhouse gas emissions trading programs, such as the Regional Greenhouse Gas Initiative (RGGI).

The bill would dedicate any revenues received through the auction or other sale of allowances to a special non-lapsing fund, the “Global Warming Consumer Benefit Fund,” and specify the use of those revenues to support programs or measures that provide consumer benefits. The bill defines “consumer benefit” to include programs that promote energy efficiency, mitigate electricity ratepayer impacts, promote renewable or non-carbon-emitting energy technologies, stimulate investment in development of innovative carbon emissions abatement technologies, address electricity end-use energy efficiency in the commercial, industrial and institutional sectors, and reduce electricity demand in urban areas. Moneys in the fund would also be used to cover the costs incurred by the New Jersey Economic Development Authority, the Board of Public Utilities, and the Department of Environmental Protection in the administration of an emissions trading program to reduce emissions of greenhouse gases.