Big money behind RGGI: Goldman Sachs, Morgan Stanley, JP Morgan Chase, Barclays Bank, hedge funds. NJ Gov. Christie pulls out

5/26/11, "Christie to pull N.J. out of cap-and-trade energy program," NJ Record, Scott Fallon and John Reitmeyer

7/28/10, "The secrets 10 states and Wall Street don't want you to know," by Mark Lagerkvist, NJ Watchdog

"Under the RGGI scheme, the smell of profiteering is powerful. New Jersey and nine other Northeast states have sold

• $662 million in carbon dioxide permits since 2008.

The bidders at RGGI auctions include Goldman Sachs, Morgan Stanley, Merrill Lynch, JPMorgan Chase and other Wall Street heavyweights....



RGGI publishes lists of potential bidders who submitted “intent to bid” applications. The lists offer a glimpse of whose trade secrets RGGI is keeping confidential.

The most conspicuous are the financial power brokers who generate money, not electricity. The most recent list includes

• Morgan Stanley Capital Group, Merrill Lynch Commodities, Barclays Bank and Louis Dreyfus Energy Services.
  

• Previous auctions have included JP Morgan Ventures Energy and
  
• Goldman Sachs, through its J Arons & Co. subsidiary.

At RGGI auctions, the utilities that need the CO-2 allowances must compete against private interests that can profit by driving prices up. The scheme affects the 209 electric generating plants with capacities of 25 megawatts or more.

“The electric power sector will be vulnerable to competition from hedge funds and other financial institutions and entities that may drive up the price of RGGI allowances,” a PSEG Public Services Corp. official complained to regulators in a 2007 letter.

• “The result will be higher energy prices.”
  

With 14 power plants in RGGI states – including 11 in New Jersey – PSEG has estimated it needs to purchase 16 million permits a year to cover its carbon emissions....

• But exactly who is buying what at these auctions? How much of the carbon market have they cornered?
  

What effect will the wheeling and dealing have on the electricity bills paid by consumers?

• That’s none of our business, according to the bureaucrats in charge.
  

They denied New Jersey Watchdog’s Open Public Records Act requests for auction details,

• contending the bidders’ “expectation of privacy” and
  

• “trade secrets”
  

• outweigh the public right to know.

RGGI executive director Jonathan Schrag claims RGGI is not a “public body” subject to state open records laws – even though it’s

• a non-profit cooperative created and governed by the states of New Jersey, New York, Connecticut, Massachusetts, Maine, Rhode Island, New Hampshire, Vermont, Delaware and Maryland.

The New Jersey Department of Environmental Protection contends it

• “does not have documents responsive to (the) request in its possession.”
  

Reached by telephone while vacationing, Schrag expressed surprise at NJDEP’s statement. He said RGGI provides details of auction particulars to all 10 states.

• State officials were ready with more hot air: “Even if the documents requested were in the possession of NJDEP…requested items would also be subject to confidentiality as trade secrets,” the agency argued in its written response.

“Balancing the interests of the ten signatory states…and the potential harm to the performance of the auctions against the private right to access and disclosure of such documents, the private right to access would be outweighed by the public interest in confidentiality of any records maintained by RGGI Inc.,” concluded NJDEP.

When Schrag returned from vacation, he declined New Jersey Watchdog’s request for an interview. According to RGGI records,

• all ten states have agreed not to release so-called ”market sensitive information” –
  

• even weeks, months or years after the auctions are over....

RGGI pretends its scheme provides “the maximum level of public disclosure.” For each quarterly auction, it releases aggregate totals and statistics in a report by an $185,000-a-year consultant who invariably concludes “the auction was administered in a fair and transparent manner” with “no material concerns regarding the auction process.”

But there is no disclosure of the auction winners and how many

• governmental CO-2 permits they purchased."...

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5/26/11, "Christie to pull N.J. out of cap-and-trade energy program," NJ Record, Scott Fallon and John Reitmeyer

"The withdrawal from RGGI undoes one of former Gov. Jon Corzine’s signature issues. Corzine signed onto RGGI in 2008 when it was a bi-partisan effort that was originally pushed by then-New York Governor George Pataki, a Republican. Corzine even touted it at

• a 2007 European Union meeting in Portugal."

photo from NJ Watchdog