A panel of Connecticut’s energy, environmental, transportation and economic development leaders reached consensus this week on a road map for supporting the next generation of plug in electric vehicles.

The initiatives identified in the report, state officials said, promise to create incentives for electric car consumers and send clear signals to the automobile industry and trade allies that Connecticut should be high on the deployment list for the next generation of clean cars.  Officials also promised that the efforts would help the state to reduce greenhouse gas emissions and promote energy independence and security.

The Electric Vehicles Infrastructure Council, which was formed last November in response to an executive order issued by Gov. M. Jodi Rell, issued its Final Report Wednesday, identifying strategic priorities intended to pave the way for improvements like a network of public and in-home charging stations and legislative priorities that would offer tax incentives to help consumers avoid sticker shock.

Council members emphasized in the final report that Connecticut’s goal is to gain early access to the first wave of mass-produced electric cars, vehicles promising to promote green jobs and smart grid features while reducing carbon dioxide, a key contributor to global climate change.

Two automobile manufacturers with next generation electric cars in development, General Motors and Nissan, have already informed the state government that, especially given the interest and industry support demonstrated by the work of the Council, they plan to include Connecticut in their first wave of product roll-outs this fall.  While welcome news, that also puts pressure on the state’s electric utility industry, building officials, transportation officials, utility regulators and others to work together to develop public electric vehicle charging stations and facilitate the deployment of affordable home charging stations so that electric vehicles can charge in garages overnight.

Only 24 Connecticut motorists have registered plug-in electric vehicles in the state so far, but the Council’s Final Report sets a goal of 25,000 by 2020.  To achieve that goal, officials agreed they need to work together to streamline regulatory and permitting processes, encouraging overnight charging with favorable “time-of-use” electric rates, and build public-private partnerships to develop a network of convenient charging stations across the state to ease so-called “range anxiety,” the fear that a motorist might not be able to find charging stations on the road.  Rapid installation of home charging stations is also critical, officials said, to ensure that electric vehicle buyers can get the home equipment installed promptly after purchasing the new vehicles from auto dealer showrooms.

The Council concluded that addressing these infrastructure concerns and enacting tax incentives and other laws that streamline approvals for electric vehicles will induce consumer interest in buying the vehicles and attract the industry to prioritize the upcoming product releases in Connecticut.

Many of the more than 30 recommendations of the Council are underway already, as officials form implementation teams to begin to tackle the challenges of the industry.

Author’s Note: The author is a member of the Council, having been appointed by Gov. Rell to serve as a representative from the private sector member of the electric energy industry.  All documents and presentations assembled by the Council can be viewed by copying the following URL into your browser: http://www.ct.gov/dpuc/cwp/view.asp?a=3856&q=452086

Its been 10 years since Cape Wind Associates, LLC originally proposed developing 130 wind turbines in Nantucket Sound and, after navigating successfully through a labyrinth of federal, state and local permitting and siting challenges and fending off the perfect storm of litigation, the winds may finally be blowing in Cape Wind’s direction. (Check out this link for a good history of Cape Wind, details on the project, and legal challenges and the controversies surrounding it: http://en.wikipedia.org/wiki/Cape_Wind).

Even though now fully permitted for construction, however, the challenges for the nation’s first offshore wind project are far from over as utility regulators consider whether to approve the power purchase agreement (PPA) and public debate in Massachusetts continues to question the wisdom of allowing governmental support for a private project.  Cape Wind still needs to complete the project financing arrangements, estimated at $1 to $2 billion, and an approved PPA is a crucial foundation for commercial financing.

According to National Grid’s May 10, 2010 filing with the Massachusetts Department of Public Utilities (DPU), in which it submitted the PPA documents requesting approval of the power purchase arrangements, the utility subsidiaries of National Grid, Massachusetts Electric Company and Nantucket Electric Company plan to buy about 50% of Cape Wind’s power output at 20.7 cents per kilowatt hour over 15 years, which would represent approximately 3.5% of National Grid’s electric distribution load in Massachusetts and exceed its mandate under the state’s renewable portfolio standard obligation, as set forth in the Green Communities Act.  National Grid further stated that the average residential homeowner using 500 kWh per month would see an increase of $1.59 per month in 2013, equal to 2.2% increase on the bill at today’s energy commodity prices.

And so, now that the tough environmental and siting decisions have been made in Cape Wind’s favor, the issue has been joined at the DPU on the project’s economics and whether the public (in the form of Massachusetts ratepayers) should support the project.  Just this week, an Op-Ed writer in the Boston Globe criticized the administration of Massachusetts Gov. Deval Patrick’s alleged lack of transparency, political support for the high energy cost of the PPA and the price risk contingencies in the contract.  (The energy cost can go up or down depending on certain market conditions and there is a limited sharing of risk in the PPA related to the project’s power output and qualification for tax credits.  The actual costs presented to the DPU are based on forecasts, but there are uncertainties and risks as well.)

This might be a good time to comment on what I like to call the renewable energy economic facts of life.  It’s a fact that renewable energy costs more than energy generated with fossil fuel sources, such as coal or natural gas.  There’s simply no way around that fact. Whether a project is solar, biomass, fuel cell, wind powered or some other renewable source, the cost of the technology and project development is simply higher and sometimes far more expensive than fossil generation.  When it comes to market forces, therefore, generators of renewable power cannot sell the energy economically into a functioning market without substantial price supports or other subsidies.

One such subsidy is the federal government’s 30% investment tax credit and the production tax credit, but these tax credits are not enough to help renewable projects to clear the hurdle.  They still need a long-term PPA with a credit-worthy energy buyer and a vibrant market for the renewable energy certificates (RECs) generated by the project.  (Just yesterday, New Jersey's governor signed into law a measure that would create ocean RECs or ORECs to support such projects.  See blog post below.)  Depending on deal terms that include who (buyer or seller) acquires the ownership rights to the RECs, the per-kilowatt-hour energy cost can increase or decrease.

In Cape Wind’s case, the PPA buyer is acquiring all of the environmental attributes of the wind power, including the RECs, and capacity rights in addition to the energy itself.  That means that National Grid will have the right to sell the RECs in the market and credit the ratepayers for revenues generated in the marketplace as a result.  The net energy cost, therefore, will likely be less than the 20.7 cents per kWh specified in the PPA.

Ultimately, the question for Massachusetts regulators and the public will be whether the renewable energy, which promises clean renewable energy that reduces greenhouse gas emissions and global climate change, is worth the cost.  If we really want to diversify our power supply with clean renewable energy and reduce our reliance on coal and natural gas fired generation, projects like Cape Wind deserve public support and contracts like the ones pending before the DPU merit serious consideration.

New Jersey Gov. Chris Christie signed into law the Offshore Wind Economic Development Act Thursday, thereby endorsing an initiative designed to spur economic growth through the development of renewable energy and green jobs.

Just as NJ has been a leader in providing substantial market-based economic support for solar energy through a rigorous solar renewable energy certificate, this new legislation is intended to establish an offshore wind renewable energy certificate program (OREC) to provide market support for wind energy.  The measure also provides offshore wind developers with financial assistance and can be combined with tax credits from existing programs for businesses that construct manufacturing, assemblage and provide water access facilities to support the development of qualified offshore wind projects.

“The Offshore Wind Economic Development Act will provide New Jersey with an opportunity to leverage our vast resources and innovative technologies to allow businesses to engage in new and emerging sectors of the energy industry,” Christie said in a prepared statement. “Developing New Jersey’s renewable energy resources and industry is critical to our state’s manufacturing and technology future.

The bill directs the New Jersey Board of Public Utilities (BPU) to develop an offshore renewable energy certificate program and, by requiring that a percentage of electricity sold in the state to be generated from offshore wind energy, creates an offshore wind “carve out,” or subdivision within the existing renewable portfolio standard in NJ similar to the solar program.

The offshore wind carve-out is intended to support at least 1,100 megawatts of generation from “qualified” offshore wind projects, which are defined to include projects developed in the Atlantic Ocean and which are connected to the electric transmission system in New Jersey.

Through the legislation, the New Jersey Economic Development Authority (EDA) will provide financial assistance to qualified offshore wind projects and associated equipment manufacturers and assembling facilities.

The signing of the Offshore Wind bill is not the first time Christie has expressed support in recent months for offshore wind development.  In June, he signed a memorandum of understanding with nine other East Coast governors establishing the Atlantic Offshore Wind Energy Consortium to facilitate federal-state cooperation for commercial wind development on the Outer Continental Shelf off of the Atlantic coast.

As the U.S. Environmental Protection Agency continues to roll out the details for the so-called greenhouse gas (GHG) tailoring rule, Step 1 of which is set to take effect on Jan. 2, 2011, EPA last week announced two expedited rulemakings designed to plug regulatory gaps that could impair the GHG Tailoring Rule’s implementation.

EPA announced last week that 13 states have non-compliant state implementation plans (or SIPs) in that they do not clearly identify GHGs as pollutants subject to the Prevention of Significant Deterioration (PSD) program permitting.  As a result, large existing sources in those states that might be increasing their GHG emissions by more than 75,000 tons per year (the GHG Tailoring Rule first step threshold) cannot obtain a PSD permit that covers GHGs as required by the GHG Tailoring Rule.

EPA is therefore proposing to launch a “SIP Call” to those 13 states and any other state that determines its own program is inadequate to cover GHGs. 

Separately, recognizing that some states may not act quickly enough to allow for compliance by the January 2, 2011 implementation of the GHG Tailoring Rule, EPA announced that, for the first time since the Clean Air Act was enacted, the EPA plans to issue its own Federal Implementation Plan (or “FIP”) for GHGs to allow for the EPA to issue its own federal PSD permit to sources above the thresholds that are located in states not yet compliant with the rules.

These gap-filling regulatory developments are aimed at facilitating GHG Tailoring Rule compliance by the biggest sources of GHG emissions. It covers large industrial facilities such as power plants, cement kilns and oil refineries that are responsible for 70% of the GHGs from stationary sources.

Beginning January 2^nd, the GHG Tailoring Rule permitting requirements will apply for large facilities already permitted as major sources under the Clean Air Act for non-GHG pollutants, such as sulphur dioxide and nitrogen oxides. These facilities will have to account for GHGs in their applications if they increase GHG emissions by at least 75,000 tons of carbon dioxide equivalent a year.  Subsequent regulatory triggers apply in the future under the GHG Tailoring Rule.

Effective July 1, 2011, the GHG Tailoring Rule will extend to all new facilities with GHG emissions of at least 100,000 tons a year and modifications at existing facilities that increase GHG emissions by at least 75,000 tons a year.

EPA said last week in a statement that the results of these new expedited rulemakings would be temporary measures in place until states revise their SIPs and assume responsibility for GHG permitting. EPA is expediting its rulemaking process to ensure the rules are finalized before the January 2^nd start. A public hearing has been scheduled on its proposals for August 25^th and EPA will accept written public comments over the next 30 days.

It didn't take long for the Chamber of Commerce of the United States of America to sue the U.S. Environmental Protection Agency and its administrator, Lisa Jackson, after the EPA's denial of the Chamber's petition was published in the Federal Register on August 13, 2010.

That same day, the Chamber filed its petition for review with the U.S. Court of Appeals for the District of Columbia Circuit.

So the EPA's Endangerment Finding and Cause and Contribute Finding (which are regulatory prerequisites to the EPA using the Clean Air Act to regulate greenhouse gases from new motor vehicle exhaust) are now in the hands of the federal appellate court system. 

The U.S. Environmental Protection Agency Friday denied 10 petitions for reconsideration of its Endangerment and Cause or Contribute Findings for Greenhouse Gases under Section 202(a) of the Clean Air Act.

Led by the Chamber of Commerce of the United States of America, the petitions sought to put the brakes on EPA’s regulatory steps that would serve as the trigger for classifying greenhouse gas (GHG) emissions as pollutants under the Clean Air Act.  Although Section 202(a) covers exhaust from new motor vehicles, regulating GHGs in this context has far broader implications because other sections of the Clean Air Act use the same definition of “pollutant” and the regulatory findings, if allowed to stand, will trigger broader consequences for stationary sources like major power plants, industrial boilers and cement kilns.  (EPA’s original findings can be found in the December 15, 2009 Federal Register at 74 FR 66496).

In denying the petitions to reconsider its findings, EPA said that petitioners’ arguments and evidence are inadequate, generally unscientific, and do not show that the underlying science supporting the Endangerment Finding is flawed, misinterpreted by EPA, or inappropriately applied by EPA.  The denial can be found in the August 13^th Federal Register at 75 FR 49556 and a 3-volume, 360-page compendium supporting EPA’s denials can be found at www.epa.gov/climatechange/endangerment.html.

Citing widely-reported e-mails from the United Kingdom-based Climatic Research Unit of the Intergovernmental Panel on Climate Change questioning the climate science, the petitioners argued that recent revelations show that the science supporting the EPA’s findings was flawed or questionable, and that EPA should reconsider the Endangerment Finding.

EPA replied that the petitioners’ claims and supporting information do not change or undermine the scientific understanding of how anthropogenic emissions of GHGs cause climate change and how human-induced climate change generates risks and impacts to public health and welfare.  “This understanding has been decades in the making and has become more clear over time with the accumulation of evidence,” EPA wrote in response.

“The core defect in petitioners’ arguments is that these arguments are not based on consideration of the body of scientific evidence.  Petitioners fail to address the breadth and depth of the scientific evidence and instead rely on an assumption of inaccuracy in the science . . .,” said EPA.

EPA’s response to the petitions shows that EPA remains committed to pursuing regulatory changes that address climate change even as global warming legislation continues to stall in the Congress.

Ms Cindy Sage of Sage Associates (USA) is the author of the "Summary for the public" that is written in an alarmist and emotive language and whose arguments have no scientific support from well-conducted EMF research. She is also the author of five more chapters (with a total of 6 out of 17 chapters) and the co-author of the final key chapter on policy recommendations.

There is a lack of balance in the report; no mention is made in fact of reports that do not concur with authors’ statements and conclusions. The results and conclusions are very different from those of recent national and international reviews on this topic (see Annex 1 and 2).

It’s only been about three months since TransCanada Power Marketing Ltd. sued the Massachusetts Department of Public Utilities (DPU), its commissioners, and several other Commonwealth agencies, claiming that Section 83 of the Green Communities Act discriminates against out-of-state renewable energy projects in violation of the U.S. Constitution, but the case has already scored a win for TransCanada.

This week, the DPU issued an emergency rule eliminating the in-state requirement from the regulation that mandates electric utilities buy their renewable energy from projects installed in Massachusetts or off-shore wind in the Cape Cod area.  The emergency rule came just 9 days after TransCanada filed a notice of dismissal “with prejudice” to drop its lawsuit against the three named individual commissioners of the DPU.

Renewable energy industry insiders were buzzing with talk about this case at the 17^th Annual New England Energy Conference in Providence, RI, Monday and Tuesday.  Rumors had it that Commonwealth lawyers and officials were anxious to settle with TransCanada to make this case go away.  And so the emergency rule issued on June 9^th takes a major step in that direction.  In fact, the Boston Herald observed this week that the Legislature apparently suspected this provision was unconstitutional when the Green Communities Act was enacted two years ago because the act allowed the DPU to specifically strike down the provision in the event of legal action to challenge it.

Without a court decision on the merits of the TransCanada case, however, the question remains how far a state can go in promoting in-state installations of renewable energy projects without running afoul of the Dormant Commerce Clause of the U.S. Constitution. Can a state survive a constitutional attack if it mandates in-state renewable installations in exchange for in-state qualifying renewable energy certificates?

While it’s possible the federal court in Massachusetts might get a chance to decide this issue as part of TransCanada’s pending motion for a preliminary injunction, I expect that the rest of the case will get settled quickly as well and the court will not get a chance to issue a decision on the merits.  We will likely have to wait another day for the courts to answer the constitutional questions presented by renewable carve-out provisions.

On Monday night on the last day of May we will make our way home from our various Memorial Day activities and on Tuesday welcome the 2010 Atlantic hurricane season.  It looks ominous.  The National Oceanic and Atmospheric Administration reports that this year could be “one of the more active on record.”  A few things form the basis for this prognostication.

First, wind shear in the upper atmosphere is deadly for hurricanes.  In 2009 El Niño in the eastern Pacific was strong, and so was the wind shear it generated.  This year El Niño has dissipated.  Second, sea surface temperatures are higher than average.  Low wind shear and high sea surface temperature support hurricane formation.  Third, favorable wind flows off the west coast of Africa are expected.  Scientists refer to the pattern of warm waters and favorable winds over decades as the “tropical multi-decadal signal.”  A component of the tropical multi-decadal signal is the “Atlantic multi-decadal oscillation” or AMO, which is primarily identified with Atlantic sea surface temperatures.  The current state of the oscillation favors the formation of hurricanes and began in 1995.

It is worth noting that the AMO arises independently of climate change.  The IPCC includes a discussion of the AMO in its 2007 report.  The language is dense but the graphs are not and I commend them to you. Click here.  To even a lay reader like myself, it is quite apparent that something is cycling and that, whatever it is, we are in the middle of the hot portion.

So the interesting question is whether the AMO and climate change together will lead to more severe and more frequent hurricanes.  A working group of the World Meteorological Organization addressed this question in a statement published in 2006. Click here.  To quote the WMO:  “The scientific debate … is not as to whether global warming can cause a trend in tropical cyclone intensities. The more relevant question is how large a change:  a relatively small one several decades into the future or large changes occurring today?”

This is no small question.  If climate change will increase the severity and frequency of hurricanes today, then many of the steps society is taking right now may be inadequate.  Building codes, zoning decisions, and emergency response planning are all based on the likely scenarios to be encountered.  But it just may be that we don’t know the likely scenarios.  By the same token, if the climate change effect will not be noticed for decades, strategies for adaptation can be successful.

The WMO working group meets again at the end of hurricane season in November.  For planning purposes, let’s hope they can provide more guidance.  In the meantime, maybe a trip to Kansas is in order.

Several European countries already have offshore wind farms, including Denmark, Ireland, the Netherlands, Sweden, and the United Kingdom.  Earlier this year, China completed the installation of its Shanghai Donghai Bridge offshore wind farm project, which has a total installed capacity of 102 MW (enough to power 200,000 Shanghai homes) and is the first large scale offshore wind farm constructed outside Europe.  As for the United States, the Department of Interior (DOI) had issued a report last April which noted (in part) that 28 of the contiguous states have a coastal boundary (including the Great Lakes), 78% percent of the electricity demand in the United States is from the coastal states, and offshore wind has the potential to meet a large proportion of that demand.  As analyzed by the National Renewable Energy Lab, over 1,000 gigawatts (GW) of wind potential exists off the Atlantic Coast and over 900 GW of wind potential exists off the Pacific Coast.  Despite the great potential for offshore wind in the United States, not one offshore wind project has been approved for construction in the United States…until now.  On Wednesday, April 28, 2010, Secretary Salazar approved the Cape Wind project to be constructed on the intercontinental shelf off of Massachusetts.  The regulatory tide is turning… 

Approval of the Cape Wind offshore wind project despite contentious opposition by certain groups provides regulatory support for offshore wind and provides some guidance for several other offshore projects that have been proposed in the last few years.  The development of wind projects in the United States, which are (by all accounts) capital-intensive, has been hampered by concerns about the financial markets, the overall economic downturn, regulatory uncertainty as to the future role for renewables in energy policy, and environmental issues.  While Congress has yet to pass comprehensive climate and energy legislation, the approval of the Cape Wind project signals that large scale renewable energy development can play a role in economic recovery and in energy independence and that opposition by those who believe offshore wind farms are unsightly will not prevail when other factors align in favor of the development.  

The process for the Cape Wind project began in 2001, when Cape Wind Associates, LLC, submitted an application to the United States Army Corps of Engineers (the Corps) for a permit to construct an offshore wind power facility in Nantucket Sound.  Public review and opposition followed.  According to the DOI, the proposed Cape Wind project is expected to meet 75% of the electricity demand for Cape Cod, Martha’s Vineyard, and Nantucket combined and cut carbon dioxide emissions from traditional power plants by 700,000 tons per year.  The Cape Wind facility will occupy a 25-square-mile section of Nantucket Sound and produce enough energy to serve more than 200,000 homes in Massachusetts.  The maximum energy output of Cape Wind is 468 MW, with an average anticipated output of 182 MW.  The project includes a 66.5-mile buried submarine transmission cable system, an electric service platform, and two 115-kV lines connecting to the mainland power grid.

Success begets success.  And so, even though the United States is not the first country to approve the construction of an offshore wind farm, this is very encouraging for wind energy developers, the construction industry, and financial investors who were waiting to see whether the 9-year old Cape Wind proposal would pass regulatory - and especially environmental - muster and then survive the aesthetic opposition raised by some.       

Movie production or distribution is not something I get to do every day.  Or even at all.  But this opportunity is proving hard to pass up.  What happens when a windmill fails?  Let’s watch what happened in Denmark in February 2008.  http://www.windaction.org/videos/14294.  Can you get insurance for this?  And what about other problems that wind farm owners and operators might face? 

This is not of obscure interest.  Last night Interior Secretary Salazar made a decision on whether the Cape Wind wind farm project in Nantucket Sound can move forward:  he approved it.  Proponents assert this is the harbinger of a $270 billion industry and can be the source of 75% of the energy needed by Cape Cod, Nantucket and Martha’s Vineyard.  Critics point to desecration of Native American sites and rituals, as well as the destruction of unique and beautiful views.  (It seems hard to believe that nine years have passed since the project was announced. But that is due process. In the end the Secretary’s decision coincided with the views of Mass Audubon, the NRDC, the Conservation Law Foundation, the governors of Maryland, New Jersey, Massachusetts, Rhode Island, Delaware and New York, national policy and national opinion polls.).

But let’s return to our exploding wind turbine.  It goes without saying that there must be insurance for these projects.  The key is in identifying the risks and recognizing what can be insured, what requires indemnification or hold harmless agreements, and what risks must be minimized because they cannot be eliminated or transferred.  This is no more than the usual risk management paradigm.

A failed wind turbine is an obvious risk and we can be confident that our Danish wind entrepreneurs procured property insurance.  The description accompanying the video identifies high winds during a storm and a failed braking mechanism as the cause of the calamity. Two technicians barely managed to escape. Debris was hurled 500 meters. While the cause of the loss might seem obvious (high winds and covered), one can be sure the applicable policy was reviewed closely to ensure a "wear and tear" exclusion was not applicable or an anti-concurrent causation clause did not apply.

Less certain is the scope of business interruption insurance available.  While certainly the output of one turbine is now absent, is that enough to trigger business interruption coverage, which often requires a “necessary interruption” of one’s business?  Perhaps more significantly, who bears the risk if the wind does not blow, or the design is not as efficient or productive as anticipated.  Similarly, what are the implications for promises of startup by a certain date or contractual obligations to deliver a certain quantity of power or that certain tax credits will be available. 

Another side of the operation is liability exposure.  Are individuals or property likely to be injured by a failure?  What is the kind of injury?  Again, it is highly unlikely the Danes did not obtain coverage for an individual or vehicle injured or damaged by the failing structure (whether it was the turbine, the blades or the mast).  Other issues are not so obvious.  In England claims have been asserted that infrasonic waves are dangerous.  Low frequency noise complaints or “strobe effects” are claimed to cause injury.  We may expect assertions of loss of property values when windmills disturb high-priced views.  Will a general liability policy pick up these claims? 

In the past, we've explored the importance of regulatory certainty and the challenges posed by regulatory uncertainty.  Whether financing clean tech and renewable energy projects or deciding which states provide the best incentives for manufacturers and developers of such emerging technologies and renewable projects, a state's regulatory environment plays a critical role.  This is why recent actions by some governors to move money out of the budgets designated for clean tech and renewable energy or energy efficiency projects for use in closing budget gaps raises a concern. 

As known to readers of our climatelawyers blog, the Regional Greenhouse Gas Initiative (RGGI) was the first mandatory regional cooperative in North America through which ten signatory states in the northeast have committed to cap and then reduce carbon dioxide emissions by setting carbon emission limits on the power industry.  The compliance period began in 2009.  As discussed in a blog entry from September 2009 just after the results of the 5th auction were announced, we posited that the drop in auction prices from the 3rd Auction to the 5th auction may be attributable to the regulatory uncertainty then-apparent as to the future of RGGI in light of the draft climate and energy legislation that was working its way through Congress at the time.  To the extent that the regulatory programs in place provide market signals and some certainty as to the commitment of the RGGI member states to promoting clean tech, renewable energy, and energy efficiency measures, the raiding of these funds creates the opposite effect: it dilutes the efficacy of the regional cap and trade program and sends mixed signals to the very industries that RGGI was intended to encourage.
 
Revenues from the RGGI auctions were specifically designed to help the member states further the goals of the regional cap and trade program and to encourage new clean tech industries to settle in these states, create more jobs in the green and clean tech space, implement greenhouse gas emission reduction and energy efficiency measures, and help customers struggling with energy bills.  As indicated in a press release issued by Governor Paterson in December 2008 following New York's participation in the RGGI auction process, "[t]he RGGI regulations require that the New York State Energy Research and Development Authority (NYSERDA) use the proceeds for energy efficiency, renewable energy, programs to reduce greenhouse gas emissions in other sectors of the economy and other initiatives."  In the spring of 2009, NYSERDA approved a plan to invest the RGGI funds.  In December, the New York legislature approved New York's Governor Paterson's proposal to raid the RGGI auction fund, moving $90 million of New York's then-share of the RGGI money (which, at the time comprised half of the total $180 million allocated to New York from the auction proceeds) to the State's general fund to cover the State's budget shortfall.  Following suit, just last week, New Jersey's Governor Christie decided to move $65 million raised through the RGGI auctions (the full amount allocated to New Jersey from the RGGI auctions to date) from the Global Warming Solutions Fund to the general fund to help address the State's deficit.  Connecticut is now contemplating moving money from funds reserved for energy programs to help address its budget shortfall.  In contrast, Rhode Island announced last week that it will not shift RGGI money to fill that state's budget shortfall, noting that state law prevents the governor from moving the nearly $9.3 million received by Rhode Island through the RGGI auctions away from the intended purpose of energy efficiency and renewable energy projects. 
 
No one disputes the reality that the current economy forces states to make difficult decisions.  However, raiding funds that were created through state and regional programs specifically to encourage energy efficiency, renewable energy, and clean tech initiatives creates further regulatory uncertainty when developers and entrepreneurs in these fields require reduction of regulatory risk in order to commit to enter a state and compete in this still-emerging market.  It also sets a troubling precedent and casts a cloud over the potential efficacy of future cap and trade programs proposed on a federal level absent, of course, measures incorporated into such pending federal legislation that prohibits such behavior.  So, while some may think that only environmentalists are opposed to the recent efforts by certain states to address their budget shortfalls by raiding energy efficiency, clean tech and renewable energy funds, there is another significant sector adversely impacted by this behavior: the very industries and entrepreneurs who are looking for regulatory signals that encourage such companies to enter the marketplace and compete globally in the renewable energy, efficiency, and clean tech sectors.