In this issue of Emissions Watch, we update clients on all wholesale electricity market participants with several updates pertaining to RGGI (Regional Greenhouse Gas Initiative).

RGGI announced that the next Program Review will start this fall and continue into next year. This means that the earliest any changes to the program will become effective is the end of 2022.

In addition, annual 2020 CO2 emissions data was finalized earlier this month and totaled 73.7 million tons. ESAI provides a detailed analysis of what this means for the upcoming cap adjustment between 2021 and 2025. ESAI also provides an update on recent RGGI OTC prices and how those prices compare to our outlook.

Auction prices continue to exceed ESAI expectations under the Massachusetts CO2 Cap regulation. In December, the fourth auction was held since this regulation was implemented in January 2018 and the clearing price was $7.25/metric ton. ESAI estimates that an allowance price of $5.20/metric ton (in addition to the RGGI price) is sufficient to drive emissions reductions.

ESAI reviews the impacts of legislation that was proposed in Maryland this past January that, if passed, will ban in-state coal generation after 2030. ESAI discusses federal updates, including:

• President Biden’s recent Executive Orders pertaining to climate and the U.S. successfully re-joining the Paris Agreement on February 19.
• FERC’s potential role in advancing President Biden’s decarbonization efforts and the January 19 decision by the D.C. Circuit court to vacate the Affordable Clean Energy Rule.