On November 30, 2010, President Barack Obama’s Council of Advisor’s on Science and Technology (the “Council”) called for more investment in energy Research & Development (“R&D”) funding.  The Council suggested in a November 2010 Report on this topic that the amount of money spent on energy R&D should increase from $5 billion per year to $16 billion per year.  The Council also suggested this money come from small charges on energy production, delivery and/or use.  At the same time that the Council promoted increasing support for energy R&D, the New York Times reported that at least three states facing financial crisis have used the funds from the Regional Greenhouse Gas Initiative (“RGGI”) to promote a balanced budget, instead of using these funds for investment in renewable energy or energy efficiency.

Under RGGI, 10 Northeast and Mid-Atlantic states cap carbon dioxide emissions from electric power plants and charge the plants for emissions produced.  RGGI has created $729 million for those 10 states, each of which is supposed to use their share to invest in renewable energy and to promote energy efficiency.  The RGGI agreement also requires the participating states to use 25 percent of their allocated money on providing consumer benefits, such as including low-income electricity assistance, or on strategic energy purposes.
 
Recently, New York, New Hampshire, and New Jersey have taken funds from the RGGI pool and used them to balance their state budgets.  Governor Paterson of New York used $90 million from RGGI funds to address a state budget deficit of almost $50 billion through March 2013, and New Hampshire took $3.1 million from its similar RGGI fund.  Governor Chris Christie of New Jersey has said that the state would use $65.2 million in RGGI funds to deal with their $10.7 billion budget deficit for fiscal year 2011.

This issue is gaining more attention, as RGGI opponents in New Jersey have introduced a bill to end the state’s participation in the program.  Opponents of RGGI expressed concern that the states are using the money for other programs.  Supporters of RGGI and related programs have warned that families will pay higher energy bills this winter as a result of the diversion of funds.

For a copy of the New York Times Article, click here.