A sweeping greenhouse gas bill that passed out of the General Assembly’s Environment Committee has revived a two-year old debate about Connecticut entering into an interstate compact aimed at creating a cap-and-trade system for gasoline producers and distributors known as the Transportation and Climate Initiative (TCI).
Connecticut Republicans and the Connecticut Energy Marketers Association (CEMA) have raised the alarm over the bill, which would grant the commissioner of the Department of Energy and Environmental Protection (DEEP) the ability to enter into interstate compacts without the approval of the legislature and implement market-based compliance programs in order to lower Connecticut’s emissions to levels set years ago by the legislature.
Although Connecticut under both Gov. Dannel Malloy and Gov. Ned Lamont was part of the TCI agreement, the legislature in 2021 ultimately declined to sign off on implementing the plan under its final memorandum of understanding. The program was pushed heavily by DEEP Commissioner Katie Dykes, Gov. Lamont and environmental and transportation advocacy groups.
In 2021, Republicans and other opposing groups like CEMA and the Motor Transport Association of Connecticut, which was also fighting against the highway use tax on trucks, said the program would raise the price of gasoline by forcing gasoline producers and distributors to essentially buy carbon credits at auction with a cap on the number of credits available to purchase, which decreases over ten years.
The TCI program would result in an acknowledged increase to gasoline prices, although estimates of how much the increase would be ranged from 5 cents per gallon in the first year to potentially 26 cents or more per gallon by the final year. The money generated from the auctions would be distributed to participating states to help support electric vehicle infrastructure, public transportation and climate justice initiatives.
Ultimately, the legislature declined to act on the TCI program and Connecticut was not the only state to do so. While twelve states and Washington D.C. all signed onto the initial TCI agreement, when it came time to finally implement the program, there wasn’t enough state support to move forward.
Massachusetts Gov. Charlie Baker initially signed onto the program, but later withdrew, as did Rhode Island Gov. Dan McKee and New Hampshire Gov. Chris Sununu.
But passage of DEEP’s greenhouse gas bill has raised the debate once again, with Connecticut Republican Senate Leader Kevin Kelly, R-Stratford, and Republican House Leader Vincent Candelora, D-North Branford, labeling the bill “TCI on Steroids.”
“These are fuel taxes in disguise. The last time the legislature considered this type of legislation, polling showed that 82% of Connecticut residents felt that additional fees and costs would place an unfair burden on low- and middle-income residents,” Kelly and Candelora said in a press release. “If state government is given this authority, appointed bureaucrats – not elected officials, will be empowered to make decisions about increasing the price of fuel, home heating oil, and natural gas.”
Chris Herb, president of CEMA, says the legislation would enable DEEP to go even further than TCI and implement a cap-and-trade program like California, with the potential to increase prices on gasoline, home heating oil and natural gas.
“We are disappointed that the Environment Committee decided to revisit this tax after it died a couple years ago,” Herb said in a press statement. “Connecticut cannot afford new taxes that drive up the cost of the fuels we use to get our kids to school, drive ourselves to work, and to heat our homes.”
Indeed, the legislature and Gov. Lamont reduced the price of gasoline in 2022 by temporarily removing the 25-cent gasoline excise tax when gasoline prices surged to ease the burden of inflation on Connecticut residents.
During public testimony on the bill, Dykes said the legislation is necessary to combat climate and meet Connecticut’s emission reduction goals. “We have to act more urgently to address these emissions,” Dykes said. “The cost, just the economic cost, not alone the human cost, of not doing so quickly and urgently are going to be insurmountable.”
While Dykes’ time during public testimony during the hearing was almost entirely occupied by questions related to bear hunting, the bill became a source of debate during the Environment Committee’s subsequent meeting during which the legislation was passed along a strictly party-line vote after Republicans attempted unsuccessfully to make amendments.
Certain sections related to small engines was removed from the bill, but ultimately retained the language allowing the commissioner to enter into inter-state compacts, with Republicans raising concerns about the economic impact of establishing cap and trade systems in Connecticut.
“This is undoubtedly going to raise costs for people in the state. We had a TCI program that we debated in this committee a couple years back,” said Rep. Stephen Harding, R-Brookfield, during the committee meeting. “This language, as it’s written, I think is pretty explicit in allowing the commissioner to implement that.”
“This is a bill that will allow the commissioner, whether it’s the commissioner today or the commissioner in the future, to implement policies that could levy fees, caps, costs that we couldn’t even imagine right now,” Harding continued.
Committee chair Sen. Rick Lopes, D-New Britain, said he doesn’t see the bill as a “tipping point” where control and authority are given over to the DEEP commissioner and noted that new regulations would still be subject to the Regulation Review Committee, and it was important to enable the commissioner to meet Connecticut’s environmental goals.
“We’ll still be here if there’s ones we don’t like, if they don’t make sense, if they increase costs dramatically, we’re all sensitive on both sides of the aisle to costs being increased on the citizens of this state,” Lopes said. “If we feel these regulations aren’t feasible, we’ll be here next year and the year after and year after that to change law and make sure they’re doable by the citizens of this state.”
The bill will head to the House of Representatives where, if taken up, will likely be a debate on the floor.
“It never ceases to amaze me how little this Governor’s administration thinks of the legislature’s role in policy-making, and how willing majority Democrats are to abdicate their responsibility in matters that affect their constituents’ wallets,” Candelora said. “They send us to Hartford for a reason, and it isn’t to give the keys to the policy shop to an un-elected commissioner.”
