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Legislation Document
SPONSOR:
Sen. Hocker & Rep. Shupe
Sens. Buckson, Lawson, Pettyjohn, Richardson, Wilson; Reps. Collins, Gray, Hilovsky, Yearick
DELAWARE STATE SENATE
153rd GENERAL ASSEMBLY
SENATE SUBSTITUTE NO. 1
FOR
SENATE BILL NO. 64
AN ACT TO AMEND TITLE 7 OF THE DELAWARE CODE RELATING TO REGIONAL GREENHOUSE GAS INITIATIVE AND CO2 EMISSIONS TRADING PROGRAM AUCTION PROCEEDS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend § 6046, Title 7 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
§ 6046. Auction revenue [Effective until July 16, 2028].
(a) All proceeds associated with the auction of CO
2
allowances shall be directed to public benefit purposes as defined herein.
(b) The Secretary shall hold any and all auction proceeds in an interest bearing account with all interest directed to the account to carry out the purposes set forth herein.
(c) The Secretary shall direct auction proceeds to the following uses:
(1) Sixty-five percent of the CO
2
allowance proceeds shall be directed to the Sustainable Energy Utility (SEU), established in § 8059 of Title 29. The SEU shall apply these funds to further the goals and activities of the SEU. The funds may be used for any of the following:
a. Promotion of energy conservation.
b. Energy efficiency.
c. Renewable energy.
d. Energy financing under § 8059(f)(3) of Title 29.
e. Allocations to the Delaware Energy Fund under § 8059A of Title 29.
(2) A total of 15% of the CO
2
allowance proceeds shall be directed to low-income consumers, of which 10% shall be directed to the federally funded and state-administered Weatherization Assistance Program (WAP), and 5% shall be directed to the federally funded and state-administered fuel assistance (Low Income Home Energy Assistance Program or LIHEAP) programs and may be used for financial assistance for energy costs for qualifying residents. Participants in the LIHEAP program funded pursuant to this section shall also participate in the WAP program within 2 years of receiving assistance through LIHEAP, subject to funding availability. These programs are administered by the Delaware Department of Health and Social Services.
(3) Percentage allocations of funds to the SEU and low-income consumers may be reviewed and adjusted annually by a committee comprised of the Secretary of the Department of Natural Resources and Environmental Control (DNREC), who shall serve as committee chair, the Chair of the Board of the SEU, and the program managers of the state WAP and LIHEAP.
(4) Ten percent of CO
2
allowance proceeds shall be directed to Greenhouse Gas Reduction Projects, selected by the Secretary following a periodic competitive proposal process. The Secretary shall utilize an advisory body composed of electric generators, environmental advocates, legislators and such others as the Secretary may find useful in developing guidelines for the proposal process and in soliciting and ranking of projects. Projects must result in quantifiable and verifiable reductions in Greenhouse gas emissions in Delaware not otherwise required by federal or state law and not receiving funding from any other state sources.
(5) The Secretary shall use up to 10% of CO
2
allowance proceeds as detailed in subsection (d) of this section. Expenses for running the RGGI program shall be met first, prior to distribution of funds as outlined above.
(6) Notwithstanding paragraphs (c)(1) through (c)(5) of this section, beginning on January 1, 2027, and each year that after, any CO
2
allowance proceeds in excess of the total dollar amount generated in 2025 must be directed to a rebate program for the reduction of energy costs to retail electric customers.
a. For purposes of this paragraph (c)(6), “retail electric customers” means as defined in § 1001(21) of Title 26.
b. DNREC shall administer the rebate program required by this paragraph (c)(6).
c. DNREC may adopt regulations necessary to administer the rebate program required by this paragraph (c)(6).
d. The rebate proceeds must be provided to the appropriate electric distribution company or electric supplier for pro rata distribution to retail electric customers.
e. The reduction of the retail electric customer’s energy costs must be reflected on the bill for services issued by the electric distribution company or electric supplier.
f. The cost, if any, stemming from providing information regarding the effects of the rebate program on a bill for services may not be passed on to the retail electric customer.
(d) The Secretary of DNREC shall use annual auction proceeds to implement the cap-and-trade program, monitor emissions, allowances and offsets, and pay any expenses associated with the program including, but not limited to, expenses related to auctioning and tracking of allowances. This may include contracting with RGGI Inc., paying of dues to RGGI Inc., or transferring funds to RGGI Inc. should DNREC determine it appropriate for RGGI Inc. to undertake any action related to implementation of the program. Any auction proceeds directed to the Secretary of DNREC may also be used to fund climate change activities designed to reduce greenhouse gas emissions from all sectors of Delaware’s economy and to maintain a public information program to educate Delawareans about the impacts of climate change on Delaware, and for any administrative costs associated with support of the SEU not otherwise provided for under § 8059 of Title 29.
Section 2. Amend § 6046, Title 7 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
§ 6046. Auction revenue [Effective July 16, 2028].
(a) All proceeds associated with the auction of CO
2
allowances shall be directed to public benefit purposes as defined herein.
(b) The Secretary shall hold any and all auction proceeds in an interest bearing account with all interest directed to the account to carry out the purposes set forth herein.
(c) The Secretary shall direct auction proceeds to the following uses:
(1) Sixty-five percent of the CO
2
allowance proceeds shall be directed to the Sustainable Energy Utility (SEU), established in § 8059 of Title 29. The SEU shall apply these funds to further the goals and activities of the SEU including, but not limited to, the promotion of energy conservation, energy efficiency, renewable energy, and energy financing pursuant to § 8059(f)(3) of Title 29.
(2) A total of 15% of the CO
2
allowance proceeds shall be directed to low-income consumers, of which 10% shall be directed to the federally funded and state-administered Weatherization Assistance Program (WAP), and up to 5% shall be directed to the federally funded and state-administered fuel assistance (Low Income Home Energy Assistance Program or LIHEAP) programs. Participants in the LIHEAP program funded pursuant to this section shall also participate in the WAP program within 2 years of receiving assistance through LIHEAP, subject to funding availability. These programs are administered by the Division for State Service Centers in the Delaware Department of Health and Social Services.
(3) Percentage allocations of funds to the SEU and low-income consumers may be reviewed and adjusted annually by a committee comprised of the Secretary of the Department of Natural Resources and Environmental Control (DNREC), who shall serve as committee chair, the Chair of the Board of the SEU, and the program managers of the state WAP and LIHEAP.
(4) Ten percent of CO
2
allowance proceeds shall be directed to Greenhouse Gas Reduction Projects, selected by the Secretary following a periodic competitive proposal process. The Secretary shall utilize an advisory body composed of electric generators, environmental advocates, legislators and such others as the Secretary may find useful in developing guidelines for the proposal process and in soliciting and ranking of projects. Projects must result in quantifiable and verifiable reductions in Greenhouse gas emissions in Delaware not otherwise required by federal or state law and not receiving funding from any other state sources.
(5) The Secretary shall use up to 10% of CO
2
allowance proceeds as detailed in subsection (d) of this section. Expenses for running the RGGI program shall be met first, prior to distribution of funds as outlined above.
(6) Notwithstanding paragraphs (c)(1) through (c)(5) of this section, beginning on January 1, 2027, and each year that after, any CO
2
allowance proceeds in excess of the total dollar amount generated in 2025 must be directed to a rebate program for the reduction of energy costs to retail electric customers.
a. For purposes of this paragraph (c)(6), “retail electric customers” means as defined in § 1001(21) of Title 26.
b. DNREC shall administer the rebate program required by this paragraph (c)(6).
c. DNREC may adopt regulations necessary to administer the rebate program required by this paragraph (c)(6).
d. The rebate proceeds must be provided to the appropriate electric distribution company or electric supplier for pro rata distribution to retail electric customers.
e. The reduction of the retail electric customer’s energy costs must be reflected on the bill for services issued by the electric distribution company or electric supplier.
f. The cost, if any, stemming from providing information regarding the effects of the rebate program on a bill for services may not be passed on to the retail electric customer.
(d) The Secretary of DNREC shall use annual auction proceeds to implement the cap-and-trade program, monitor emissions, allowances and offsets, and pay any expenses associated with the program including, but not limited to, expenses related to auctioning and tracking of allowances. This may include contracting with RGGI Inc., paying of dues to RGGI Inc., or transferring funds to RGGI Inc. should DNREC determine it appropriate for RGGI Inc. to undertake any action related to implementation of the program. Any auction proceeds directed to the Secretary of DNREC may also be used to fund climate change activities designed to reduce greenhouse gas emissions from all sectors of Delaware’s economy and to maintain a public information program to educate Delawareans about the impacts of climate change on Delaware, and for any administrative costs associated with support of the SEU not otherwise provided for under § 8059 of Title 29.
SYNOPSIS
Subchapter 11-A of Title 7 delineates the Regional Green House Gas initiative, including where proceeds from C02 allowance auctions shall be expended. This Act fixes the overall amount of proceeds directed to purposes currently in the Delaware Code to 2025 levels and instructs DNREC that any auction proceeds above 2025 levels be directed to a rebate program to defray the cost of electricity to ratepayers. Under this Act, DNREC would provide rebate proceeds to the appropriate electric utility or distribution company for payment in the form of electric bill reductions to retail electric customers.
Author: Senator Hocker