In a sign of the desperate economic times in Annapolis and throughout the state, the Maryland General Assembly seems poised to divert millions of dollars initially earmarked for energy efficiency programs to the state's direct bill pay assistance program to help low income families pay their utility bills.

The Regional Greenhouse Gas Initiative (RGGI, "reggie") is a voluntary regional cap and trade program in which Maryland has opted to participate. In the simplest terms, the program generates revenue by auctioning credits or rights to allow greenhouse gas emissions above a certain level. The proceeds are then used in furtherance of certain policy objectives. For example, in Maryland, 46% of the funding available through this program is to be used for energy efficiency programs such as home weatherization. The other 54% is designated for other green energy initiatives, such as renewable energy and similar measures.

On April 8, the Budget Conference Committee agreed to divert the 46% that is earmarked for energy efficiency to help low income families pay their utility bills instead. Last year, the same decision was made, but funds from the federal stimulus act were used for energy efficiency measures, so the loss to energy efficiency was not felt. However, stimulus funds are quickly drying up.

The total funding available to Maryland under the RGGI program for 2010 is $24.1M; of that amount, the 46% that was to go toward energy efficiency is about $11M. If, as some studies suggest, every $1 spent on energy efficiency yields a reduction in electric bills of $4 over time, the $11M diverted away from energy efficiency might actually end up costing the people of the state somewhere around $44M. Furthermore, an $11M influx of money to energy efficiency as an "industry", as President Obama suggests, would spur on job creation, reduce demand for energy consumption, and have a corresponding reduction in the amount of greenhouse gas production in the state, all of which would appear to be the policy objectives of a cap and trade program. RGGI funds will not be available to assist in achieving these goals this year.

Interestingly, by subsidizing energy costs by $11M throughout the state, the General Assembly actually is increasing demand for energy by lowering the cost to the consumer.