'Intermeddlers' lose case against Delaware greenhouse gas initiative

By Mary Ann Magnell | Aug 6, 2018

GEORGETOWN, Del. (Legal Newsline) – A case that was filed in response to the Delaware’s Regional Greenhouse Gas Initiative and Co2 Emission Trading Program Act (RGGI Act) was dismissed on June 26 by the Superior Court of the State of Delaware.

GEORGETOWN, Del. (Legal Newsline) – A case that was filed in response to the Delaware’s Regional Greenhouse Gas Initiative and Co2 Emission Trading Program Act (RGGI Act) was dismissed on June 26 by the Superior Court of the State of Delaware.

The 33-page court decision written by Judge Richard Stokes cited the plaintiffs’ lack of standing for the dismissal, as well as their “conjectural” and “hypothetical” injuries due to Delaware’s RGGI Act. 

According to the decision, the plaintiffs did not produce electric bills that showed increased rates and did not produce expert testimonies that showed direct increases because, per the decision, their witnesses were “not experts on electricity pricing or on RGGI and its effects on electricity pricing.”  

The complaint - which was brought against the Delaware Department of Natural Resources and Environmental Control by plaintiffs David T. Stevenson, R. Christian Hudson and John A. Moore - claimed that they would allegedly “suffer harm in fact in that the increased costs of the allowances will be passed on to them in their electric bills.” 

The complaint, according to the decision, was grounded “on the basic economic theory that increased costs to the electricity generator directly result in increased prices to the consumer.”

Moore also stated that Delaware’s RGGI "was an unnecessary burden on Delaware business and on Delaware consumers," according to the decision.

The RGGI Act, as the decision stated, was the nation’s first "market-based program to reduce emissions of carbon dioxide" and was an attempt by Delaware and eight other states to reduce the amount of emissions emitted into the atmosphere by “large coal and other fossil fuel fired electric generating units,” or units that produced more than 25 megawatts of electricity. 

A regional cap was established on the amount of carbon dioxide that power plants could emit through carbon dioxide allowances. The participating states entered into the memorandum of understanding in December of 2005 and the RGGI was enacted by the Delaware Legislature in 2008. 

A 2012 review revealed that there was an “oversupply of allocations because of an unanticipated increased in the use of natural gas,” a decreased carbon-intensive fuel, the decision states. This resulted in a modification of the RGGI program and a reduction in the Regional Emissions Cap. 

The Regional Emissions Cap and each participating state’s individual emissions budget would decline by 2.5 percent per year from 2015 through 2020. The changes were made through an Updated Model Rule, and states agreed to revise their regulations by Jan. 1, 2014, based on the changes, which “tended to cause the prices of CO2 allowances at auction to rise.”

Although according to the filing, “plaintiffs are not subject to the amended regulations,” they alleged that the increased costs of the allowances would be passed to the customers through their electricity bills. The decision stated, however, that the plaintiffs’ electric bills actually decreased, and consequently their “argument morphed into the argument that had the amended regulations not come into effect, they would have had to pay even less on their electric bills, and thus, they are financially harmed.” 

The plaintiffs moved to exclude the defense’s expert witness Susan F. Tierney's testimony that RGGI’s effects would offset any increased costs to consumers’ electric bills. She also stated that due to the various factors that went into electricity pricing, that the plaintiffs’ and their witnesses’ opinions that “an increased in the costs of CO2 allowances directly results in an increase in electricity costs to the consumer are invalid.” 

Tierney also noted that of the two Delaware power companies of which the plaintiffs were customers, Delaware Electric Co-Op and Delmarva Power, that Delaware Electric Co-Op buys its power from Old Dominion, which is a Maryland power plant company.

The plaintiffs moved to exclude both before and during the trial for several reasons, including that the evidence was “new” and they had been “sandbagged.” Stokes dismissed the plaintiffs’ arguments.

The decision noted a “good deal of finger-pointing” about the allowed testimony, and Stokes wrote that objection to it was “much to do about nothing.” He also detailed Tierney’s accomplishments, including two reports on the economic impacts of RGGI and her 40-page long resume, and that “nothing at the hearing” changed his opinion about Tierney’s expertise regarding the RGGI Act. In fact, he stated that “she is uniquely qualified as an expert to speak to the issues relevant to this case.” 

Stokes wrote that the burden of proof was on the plaintiffs to show financial harm caused by the amended regulations of the RGGI Act. Stokes noted that the plaintiffs had “not even attempted to show it is likely that their alleged harm will be redressed by a favorable decision in this litigation” and wrote that the “plaintiffs are intermeddlers” and were “officiously meddling with Delaware’s RGGI Act.” 

Superior Court of the State of Delaware case number S13C-12-025 RFS

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