CARBON MARKET FRAUD CASE — POLITICO’s Jordan Wolman: The former head of a leading carbon credit company is facing federal charges that he and other executives committed fraud in conducting a scheme involving cookstove projects in Africa and Asia that generated tens of millions of dollars worth of credits and attracted an investment worth more than $100 million. Kenneth Newcombe, who served as CEO of C-Quest Capital before stepping down earlier this year, and Tridip Goswami, who led the firm's carbon and sustainability accounting team, could face up to 20 years in prison on the most serious charges, the U.S. Attorney's Office for the Southern District of NewYork said in a statement related to the indictment unsealed late Wednesday. CQC sought to “rapidly and aggressively” increase its cookstove projects in 2020, leading to “significant problems” in the quality of the stoves, according to the indictment. Newcombe and Goswami responded by manipulating data over the course of three years to make it look like the cookstove projects were producing more greenhouse gas emission reductions than they actually were and fraudulently inflating the number of stoves installed. The indictment is the latest significant blow to the integrity of carbon credits through the unregulated voluntary carbon market, which revolves around corporate attempts to reach climate goals by offsetting their pollution through emissions-cutting projects. WHY BILLS SPIKED — New Jersey’s ratepayer watchdog provided the clearest explanation yet of spiking power bills that walloped state utility customers and drove Republicans to criticize Gov. Phil Murphy’s clean energy policies. In a Wednesday testimony to the Assembly Telecommunications and Utilities Committee, the head of the state’s Division of Rate Counsel, Brian Lipman, provided a detailed account of how energy costs rise. I wasn’t able to attend, but his office provided written testimony, which seems like a must-read for concerned policymakers. First, he pointed out utilities make a profit on much of their spending. No surprise to readers of this newsletter. Second, he argued that many rate cases are incremental and that regulators do not always look at the whole picture, so that while each increase may seem small “for ratepayers, it is death by a thousand cuts.” The high bills are life-threatening, Lipman said: “Air conditioning is no longer a luxury, it is lifesaving. Heat-related deaths will increase as we make air conditioning more unaffordable.” Then he explored changes to rates between June 2023 and June 2024, using Atlantic City Electric as his main example, given that much of the alarm this summer came from its customers and lawmakers representing them. There have been over a dozen different changes to the company’s rates — nine times certain rates went up, four times they went down and, overall, customers are paying more. In sum, the average ACE customer’s rates are about $24 more per month this summer than last. (According to Lipman, PSE&G’s rates for an average customer were about $6.50 higher, JCP&L’s were up by over $12 and Rockland’s were $20 higher.) But it’s not just rates that have gone up — use went up too. This summer’s demand was an all-time high. In ACE’s service territory, there was 31 percent more use by average residential customers this June than last, 28 percent more in July and 10 percent more in August. “It is not entirely clear why there was more usage,” Lipman said, but, “It does appear that 2023 was significantly cooler than 2024, especially in June and July, and air conditioners are a significant part of the summer load.” Lipman, who has been critical of the costs that offshore wind will add to bills, cut through Republican talking points, though: “I want to be clear about these rates,” he said. “These rates that we have been discussing do not include offshore wind. Those costs have not been incurred, and therefore have not yet been passed on to ratepayers.” Indeed, he suggested lawmakers should look at their own actions. He said, “every utility mandate passed by the Legislature results in an increase in rates. For example, the Zero Emission Credits that the Legislature passed to force ratepayers to subsidize PSE&G’s nuclear power plants cost ratepayers an average of about $2.75 a month for the past six years.” PSE&G recently stopped asking for those subsidies because of the availability of federal price supports. While two-thirds of bills are beyond the control of state lawmakers and regulators because they are federally regulated costs, he said the state is paying too much for solar energy, energy efficiency programs and electric vehicle subsidies because “somehow New Jersey always finds the most expensive way of doing things.” — Ry Rivard
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