October 24, 2008
Vol. 38, No. 494

Contact: Valerie Gray, Air Quality Management, (302) 739-9402; or Melinda Carl, Public Affairs, (302) 739-9902

Delaware’s Regulation Governing Carbon Dioxide Budget Trading
Program for the Regional  Greenhouse Gas Initiative Is Approved
                        Delaware Poised to Participate in December 2008 Auction

DOVER, Del. – Department of Natural Resources and Environmental Control Secretary John A. Hughes has issued a Secretary’s Order approving a proposed regulation for the carbon dioxide budget trading program – Regional Greenhouse Gas Initiative (RGGI) to Address Carbon Dioxide (CO₂) Emissions from Electric Generating Units.

The regulation, effective Nov. 11, 2008, creates Delaware’s portion of the RGGI CO₂ cap-and-trade program and positions Delaware to participate in the Dec. 17, 2008 auction of CO₂ emissions allowances along with the other nine RGGI states: Connecticut, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont.

DNREC held a public hearing Sept. 22, 2008 to receive public comment on the proposed regulation after holding five stakeholder workgroup meetings since February 2008, which generated comments from the regulated community. Additional comments were received during the post-hearing phase and a response document addressing all comments was prepared by the Department’s Air Quality Management Section, which can be found online along with the Secretary’s Order and Hearing Officer’s Report at: http://www.dnrec.delaware.gov/whs/awm/Info/Regs/Pages/RGGI.aspx.

Upon implementation of the initiative, between 2009 and 2015, CO₂ emissions from power plants with large generating units or those with a maximum rated heat input capacity of equal to or greater than 25 megawatts located in RGGI states would be stabilized at levels roughly equivalent to average annual emissions during 2000-2002.

After 2015, the carbon dioxide emissions would be reduced incrementally to achieve a 10 percent reduction by 2019.  Under the cap-and-trade program, one allowance will be issued for each ton of CO₂ emissions allowed by the cap.

Each applicable electric generating unit will have to have enough allowances to cover its reported emissions for the 3-year control period. The total amount of the allowances will be equal to the emissions cap for the RGGI states.

Through RGGI’s phased approach – developed to provide regulatory certainty while avoiding dramatic electricity price impacts – Delaware will achieve environmental and economic benefits that include, in addition to reductions in CO₂ emissions, cost efficiency with the use of auction allowances and an overall successful auction design that is already serving as a model for other major carbon markets under consideration in other regions.

Carbon dioxide, or CO₂, a principal human-caused greenhouse gas, accumulates in the earth’s atmosphere and traps heat that would normally exit into outer space. Excessive amounts of greenhouse gases have contributed to global warming that leads to climate change.

Potential impacts from climate change include increased precipitation and sea level rise that could affect water supplies, increase coastal and inland waterway erosion, alter agricultural production, and directly affect the state’s forests, wetlands and estuarine environments.

The approved RGGI regulation (Regulation 1147 – CO₂ Budget Trading Program) will be published as a final regulation to the Delaware Register of Regulation on November 1, 2008. For additional information on Delaware’s RGGI development, visit: http://www.dnrec.delaware.gov/whs/awm/Info/Regs/Pages/RGGI.aspx