CONCORD, N.H. (AP) – New Hampshire’s Senate has given preliminary approval to entering a 10-state regional effort to cut greenhouse gas emissions to preserve the state’s climate and way of life.

The Senate voted 16-8 Thursday to ask its Finance Committee to review a bill that implements the Regional Greenhouse Gas Initiative known as RGGI.

Gov. John Lynch believes the initiative will help New Hampshire’s environment and economy.

The bill adds New Hampshire to the other New England states, New York, New Jersey, Delaware and Maryland in a market-based, “cap and trade” program to reduce carbon dioxide emissions from the region’s power plants.

The governors of the 10 states have signed a memorandum of understanding agreeing to the initiative. It is a regional plan, but each state must adopt its own laws and regulations. States in other regions are considering similar plans.

Under RGGI, a regional carbon dioxide emissions cap would be put in place for large fossil fuel-fired power plants beginning in 2009. Allowances would be issued equal to the total cap and apportioned to the participating states. Utilities would have to buy enough allowances within three years to cover their emissions. Since the number of allowances is limited by the regional cap, overall emissions are expected to be reduced.

New Hampshire’s cap would be 8.6 million tons per year out of 188 million tons emitted by the 10 states. Affected power plants in New Hampshire would be: Schiller Station in Portsmouth, Newington Station and Newington Energy LLC, both in Newington, Merrimack Station in Bow, and Granite Ridge in Londonderry.

Other types of allowances also are part of the plan. For example, capturing methane gas at a landfill also reduces carbon emissions. Also under consideration is using forestry management to reduce carbon emissions through techniques as simple as planting trees.

The money utilities pay for the allowances would go into a state-regulated fund to improve energy efficiency.

“By putting a price on pollution offers a source of funds to address energy efficiency,” said Sen. Harold Janeway, D-Webster.

Critics said RGGI unfairly shifts costs onto ratepayers, especially businesses.

“This isn’t about clean air. This is a tax on dirty air,” said Senate Republican Leader Ted Gatsas.

State environmental officials envision a wide range of uses for the money that include cooling and heating efficiencies. For example, money could be used to help insulate homes or to buy wood stoves or more efficient furnaces.

Environmental Services Commissioner Thomas Burack says New Hampshire’s electric users will pay higher rates regardless of New Hampshire participating in RGGI. That’s because New Hampshire buys about half its power from a wholesale market whose rates will rise as other states’ power producers buy RGGI allowances and pass on the costs to ratepayers.

If the state does not join the initiative, electric users would lose the benefit of a share of the allowances going into an energy efficiency fund whose aim is to lower both carbon emissions and energy consumption over time.

Critics said it is unfair to saddle electric ratepayers with the costs of subsidizing energy efficiency projects that they might not directly benefit from.

In response, a Senate committee is recommending lowering a threshold that triggers rebates to ratepayers. The Senate is proposing returning money from allowance sales to ratepayers if the sales price hits $6 a ton in 2009 and 2010. The House had proposed $12 a ton as the initial threshold. The Senate would increase the threshold $3 every two years until 2015 when the threshold would be eliminated.

The Business and Industry Association of New Hampshire has lobbied for a lower threshold than either the Senate or House is proposing.

Critics also said nothing prevents lawmakers from raiding multimillion dollar fund created by the bill to pay for other state spending – which would undo future savings on rates.

AP-ES-05-08-08 1540EDT

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