Power Plant Operator Files RGGI Lawsuit

Power Plant Operator Files RGGI Lawsuit

A New York power plant owner and operator is suing the state over its participation in a greenhouse gas cap-and-trade program, claiming the framework will prevent power plants in long-term contracts from recouping what amounts to a tax.

Indeck Energy filed the lawsuit against New York Gov. David Paterson and several state agencies, arguing New York's participation in the Regional Greenhouse Gas Initiative (RGGI) overstepped their legal authority to create and participate in RGGI without legislation, the New York Times reported.  RGGI began its first compliance period Jan. 1.

Indeck, which owns and operates conventional and alternative fuel power plants in New York and New Hampshire, reportedly characterized the cost of complying with RGGI as a tax. Under RGGI, electricity generators must buy permits or allowances to cover the amount of carbon dioxide they will produce in what proponents argue is a market-based framework to reduce emissions. The proceeds from the sale of the permits will be put toward renewable and efficiency efforts in the 10 Northeastern states that make up RGGI.

Environmental Advocates of New York, which bills itself as a state government watchdog, objected to Indeck's argument of being unable to recover expenses because of long-term contractual obligations. In a statement, the nonprofit said the two-year public process finalizing RGGI regulations addressed those claims, leading to the Department of Environmental Conservation creating a 1.5 million-ton set-aside for power plants in long-term contracts.

"At every step of the way for the Regional Greenhouse Gas Initiative, power plants have tried to slow down this process and this is one more example," David Gahl of Environmental Advocates said in a statement. "New York State has responded to these concerns and now it's time to get with the program."