nh-2026-187: Carbon Dioxide (CO2) Allowance Auction Program

1. Agency: Department of Environmental Services

Air Related Programs Agency Address: Department of Environmental Services Air Related Programs 29 Hazen Drive PO Box 95 Concord, NH 03302

6. (a) Summary of what the rule says and of any proposed amendments including

whether the rule implements a state statute for the first time: The New Hampshire Department of Environmental Services (Department) is proposing to readopt with amendment Env-A 4800, Carbon Dioxide (CO2) Allowance Auction Program. These rules establish the requirements and procedures for conducting auctions of CO2 allowances under the Regional Greenhouse Gas Initiative (RGGI) in New Hampshire. RGGI is composed of individual CO2 budget trading programs in each of the eleven participating states. Each state’s program is based on the RGGI Model Rule, which provides a common framework for implementing the regional program. Env-A 4800 originally became effective on April 3, 2009, and was subsequently readopted effective January 1, 2014, and May 23, 2024. The RGGI participating states completed the third RGGI program review in July 2025 and adopted amendments to the Model Rule for implementation beginning January 1, 2027. To support New Hampshire’s implementation of those amendments, the legislature amended RSA 125-O:20–29 through Laws 2026, chapter 332. Governor Ayotte signed Chapter 332 into law on July 15, 2026, and it became effective on September 13, 2026. ADMINISTRATIVE RULES (603) 271-3680 Generated on 09/17/2026 The proposed amendments to Env-A 4800 update New Hampshire’s CO2 allowance-auction requirements to reflect the revised RGGI program design. Specifically, the amendments establish a minimum reserve price of $9.00 for calendar year 2027, increasing by seven percent annually thereafter; revise the auction provisions to account for two tiers of cost-containment-reserve allowances and their respective trigger prices; and update terminology, statutory cross-references, and related auction requirements for consistency with RSA 125-O:20–29 and the companion amendments to Env-A 4600. The proposed amendments also remove provisions that are no longer applicable under the updated RGGI program. Additional information concerning the Third Program Review is available at https://www.rggi.org/program-overview-and-design/program-review. _ Does this rule implement a state statute for the first time? This proposal does not implement a state statute for the first time. 6. (b) Brief description of the groups affected: The rules affect any individual or entity interested in participating in an auction of CO2 allowances, including owners of CO2 budget units located in New Hampshire, owners of CO2 budget units located outside of New Hampshire but within those participating RGGI states that have final CO2 budget trading regulatory provisions in place at the time of the CO2 allowance auction, owners of fossil fuel-fired generation units located outside of the participating states; brokers; environmental groups; financial and investment institutions; and other market participants. 6. (c) Specific section or sections of state statute or federal statute or regulation which the rule is intended to implement: Rule Section(s) State or Federal Statute or Federal Regulation Implemented Env-A 4800 RSA 125-O:21, III; RSA 125-O:26; RSA 125-O:29

7. Contact person for copies and questions including requests to accommodate

persons with disabilities. Name: Karla McManus Title: NHDES-ARD Planning and Rules Manager Address: 29 Hazen Drive PO Box 95 Phone Number: (603) 271-6854 Concord, NH 03302 FAX Number: (603) 271-1381 Email: Karla.S.McManus@des.nh.gov ADMINISTRATIVE RULES (603) 271-3680 Generated on 09/17/2026

8. Deadline for submission of materials in writing or, if practicable for the agency, in

the electronic format specified: Friday, October 23, 2026 _ Fax X Email nhdesrules@des.nh.gov X Other: NHDES Administrative Rules Public Comment Form

9. Public hearing scheduled for:

Date: Friday, October 16, 2026 Time: 10:00 AM Place: Room 208C, DES Offices, 29 Hazen Drive, Concord, NH NOTE: NHDES security procedures require all visitors to sign in and present photo identification (such as a driver’s license). If you plan to attend the public hearing in person, please bring photo identification with you. Electronic Access, if applicable: Microsoft Teams: Join the meeting now Meeting ID: 245 835 401 708 276 Passcode: Nn6XM3yv Dial in by phone: +1 603-931-4944 United States, Concord Find a local number Phone conference ID: 797 387 019# Contact Lee LaMontagne at Lee.W.Lamontagne@des.nh.gov or (603) 271‑0864 if you have any questions or technical issues connecting to the hearing.

10. Fiscal Impact Statement (Prepared by Legislative Budget Assistant):

FIS #: 26:186, dated: Friday, September 11, 2026

1. Comparison of the costs of the proposed rule(s) to the existing rule(s):

When compared to the existing rules the proposed rules may have an indeterminable impact on restricted revenues. Any change in revenue resulting from the statutory changes to the statewide CO2 budget allowances and cost containment provisions is attributable to RSA 125-O:20-29 rather than the proposed rules.

2. Cite the Federal mandate. Identify the impact on state funds:

No federal mandate, no impact on state funds. ADMINISTRATIVE RULES (603) 271-3680 Generated on 09/17/2026

3. Cost and benefits of the proposed rule(s):

When compared to the existing rules, the proposed rules update the Carbon Dioxide (CO2) Allowance Auction Program to implement changes resulting from the 2025 Regional Greenhouse Gas Initiative program review and conform to RSA 125-O:20-29. The proposed rules establish a minimum reserve price of $9.00 for calendar year 2027, increasing by 7 percent annually thereafter. The statutory changes update the statewide CO2 budget allowances beginning in 2027 and establish two cost containment allowance levels and associated trigger prices. The proposed rules also eliminate provisions that are no longer applicable to the RGGI program.

A. To State general or State special funds:

The proposed rules may have an impact on State restricted revenue. The increase in the minimum reserve price from $2 to $9 may impact restricted revenue if the auction clearing price would otherwise fall below the minimum reserve price. Any fiscal impact is indeterminable because it would depend on future market conditions and the number of allowances sold. Any change in revenue resulting from the statutory changes to the statewide CO2 budget allowances and cost containment provisions is attributable to RSA 125-O:20-29 rather than the proposed rules.

C. To independently owned businesses:

None. 11. Statement Relative to Part I, Article 28-a of the N.H. Constitution: The proposed rules do not create, expand, or modify any program or responsibility in such a way as to necessitate additional expenditures by political subdivisions. The rules thus do not violate Part I, Article 28-a of the New Hampshire Constitution. ADMINISTRATIVE RULES (603) 271-3680 Generated on 09/17/2026