A May 19 hearing of the Senate Environment and Agriculture Committee to take public comment about the proposed Transportation Emissions and Mobile (TEAM) Community Act began with the committee voting to hold the proposal for further study.

The vote is normal procedure for new legislation and isn’t an indication of its probable success or failure, only that committee members aren’t yet prepared to move or block its progress to the full Senate.

The three-hour hearing included comments from senators and testimony from Rhode Island Department of Environmental Management (DEM) officials and representatives of advocacy and industry groups expressing support and opposition.

The Transportation & Climate Initiative (TCI) is a regional cap-and-invest program designed to reduce vehicle emissions 26 percent by 2032. Former Gov. Gina Raimondo signed a memorandum of understanding in December to join the initiative with Connecticut, Massachusetts and the District of Columbia.

The TCI is expected to generate more than $3 billion over 10 years for the participating governments to invest in green transportation options, according to TEAM Community Act sponsors Rep. Terri Cortvriend, D-Portsmouth, and Sen. Alana DiMario, D-Narragansett. The revenue for Rhode Island is projected to be about $20 million annually.

TCI is “a multistate, regional program that would cap and reduce greenhouse-gas emissions from the transportation sector across the Northeast and Mid-Atlantic by requiring fuel suppliers to purchase allowances for the carbon that will result from the fuel they sell,” DiMario told the committee. “These proceeds will then be invested in a cleaner, more resilient and more equitable low-carbon transportation system.”

The TEAM Community Act, filed in the Senate as S0872 and the House as H6310, would be the first step in Rhode Island’s implementation of TCI, by establishing statutory framework including regulatory authorities, legal compliance obligations and carbon allowances for auction.

The act “allows us to move forward in step with our neighbors to start generating revenue by requiring fuel suppliers to pay for the carbon they are generating with the sale of their products,” DiMario said. “This revenue will then be used to put Rhode Island in a strong position to be ready for the changes that are coming nationwide in the transportation sector and capitalize on federal programs.”

The bill would result in new jobs and direct 35 percent of proceeds to communities hardest hit by transportation emissions such as those located near highways, she said.

Labor, business, health, technology and environmental groups weighed in on the development of TCI, while the TEAM Community Act provides opportunities for local input about how the funds will be used, DiMario said.

Public testimony came from 21 people who called into the hearing, which was televised and streamed online but physically closed to the public because of ongoing COVID-19 restrictions.

Committee member Sen. Gordon Rogers, R-Foster, referred to the bill as a “gas tax” potentially triggering financial punishment on rural residents who must travel longer distances to conduct daily activities than those in more densely populated communities.

Rogers also claimed the growing calls for adoption of electric vehicles (EVs) wouldn’t deliver the promised economic freedom from fossil fuels for cash-strapped municipalities unable to afford more expensive commercial EVs for jobs such as snow plowing and school busing.

Terry Gray, DEM deputy director of environmental protection, conceded the emissions cap planned to go into effect in January 2023 could result in higher gas prices, but the increases are likely to remain within an anticipated range.

“By setting this program ambition at 30 percent over nine years, we’ve really focused on fair and predictable impacts at the pump,” he said. “And if the fuel suppliers choose to pass their compliance costs directly through to customers, the modeling that we have shows that the price impact at the pump will be between five and nine cents per gallon.”

He also noted several major oil companies have projected the legislation could boost money-saving innovation.

“It is going to drive them to come up with formulations that they already have for lower carbon-intensive fuels, which would require them to buy less allowances for the fuels that they distribute,” Gray said. “And that means that the price may actually be less than what we’ve modeled. Quite a bit.”

Gray also countered what he called the “inaccurate” assertion that TCI is a gas tax.

“A tax only generates revenue. The real operational piece of this is that declining cap,” he said, referring to a planned reduction of emissions allowed by producers over time. “The revenue that is generated from the auction of the allowances that are associated with that declining cap will then further the mission by allowing us to make significant investments in clean transportation.”

Mark Borowski, East Coast government affairs manager for BP America, said the energy giant supports TCI and the TEAM Community Act as examples of effective carbon-pricing legislation.

“We believe that it is good not only for the environment and for the people of Rhode Island, we believe it is a business-friendly way to help transform the transportation sector while reducing emissions,” Borowski said.

Last year the London-based multinational oil and gas company announced its ambition to become a net-zero carbon emissions company by or before 2050, which Borowski said includes “advocating for well-designed, market-based policy like this.”

“Such programs provide the certainty companies like ours need to invest and bring new technologies to people faster and at the scale required for real progress,” he said. “Importantly, they also incentivize competition to provide lower carbon energy solutions to consumers at the lowest possible cost.”

Daniel Fitzgerald, Rhode Island advocacy lead for the American Lung Association, said TCI would help improve public health threatened by transportation emissions.

“This air pollution threatens the health and lives of so many of our residents including those who are most vulnerable to harm,” Fitzgerald said. “The Transportation Climate Initiative is an important tool to reduce transportation pollution, improve air quality, reduce carbon pollution and of course invest more in efficient and reliable public transportation.”

Brian Moran, director of government affairs for the New England Convenience Store and Energy Marketers Association, claimed implementing TCI would be a mistake “given its design flaws and risks of fuel outages and shortages, its lack of meaningful emission reductions, loss of the people’s voice in this process and resulting net losses of revenue.”

Moran said the support of only three states and the District of Columbia, compared to an original group of 13 states taking part in discussions, as well as problematic oversight issues, call into question the program’s viability.

“All future price increases under this program will be handed over to a multistate group of environmental regulators for decades to come,” Moran said. “TCI will cost the people and businesses of Rhode Island over a billion dollars by 2032 for only a [0.3] percent reduction in transportation emissions.”

DiMario countered Moran’s contention only three New England states and the District of Columbia remain interested in TCI from the initial group of 13 states, noting the others don’t yet have enabling legislation allowing them to pursue further participation.

“It’s really not accurate to say that there are only three states and Washington, D.C., it’s just that we are fortunately at the forefront of this,” she said.