Virginia on path to rejoining Regional Greenhouse Gas Initiative

CHARLOTTESVILLE, Va. (WVIR) - Virginia is on its way to rejoining a regional agreement that works to accelerate clean energy generation and limit carbon emissions.

The Regional Greenhouse Gas Initiative, often referred to as RGGI, is currently comprised of 10 states, not including the Commonwealth. As a market-based carbon trading program, the idea is to incentivize energy producers to transition to clean energy by requiring them to purchase a limited number of permits for each ton of carbon they emit.

Calling the agreement a “hidden tax,” former Governor Glenn Youngkin effectively pulled the state out of RGGI in 2023, albeit with legal troubles. But just this week, the Virginia Senate passed a bill that would direct the state to rejoin the initiative in a vote split directly down party lines. 29News reached out to a spokesperson for Governor Abgail Spanberger, who directed us to the statement she made in her joint address to lawmakers in January, when she voiced her support for reentry.

“This is about cost savings. RGGI generated hundreds of millions of dollars for Virginia, dollars that went directly to flood mitigation, energy efficiency programs and lowering bills for Virginia families who need help most,” she said. “Withdrawing from RGGI did not lower energy costs. We have seen them rise, in fact. Of course, the opposite has happened. It just took money out of the pockets of Virginians. And so, it is time to fix this mistake now.”

Both those in favor and those against RGGI cite affordability in their arguments, though they have different ideas of what that means in practice.

“It’s about leveraging markets to help with some critical affordability challenges,” said Cale Jaffe, the Director of the University of Virginia’s Environmental Law Clinic, who also served on Spanberger’s transition team. “The idea is to use market forces to drive a transition to zero carbon electricity generation.”

Jaffe says that RGGI’s founding was not political; in 2005, seven states agreed to the initiative, including four Democratic governors and three Republicans.

“The idea was we care about doing something about climate change, and at the same time, we want to make sure we do this in a way that is a market friendly approach to driving that innovation,” Jaffe said. “We’re taking on two really important tasks. One is helping to transition to a lower carbon electricity generation system, that’s going to be more affordable in the long run. And we’re making it more affordable immediately for low-income families.”

The majority of the money funneled into RGGI goes back to the state for energy efficiency and flood preparedness projects, though about 5% goes towards administrative costs. While it was a member of RGGI from 2021-2023, Virginia received more than $800 million in funding for low-income housing and infrastructure related to flood resiliency.

In Charlottesville, more than $19 million went towards seven affordable housing projects, according to Sunshine Mathon, the Executive Director of the Piedmont Housing Alliance, to help drive down energy costs for low-income residents.

“When RGGI funding was established, it became (and has continued to be) a crucial funding source for every single project in recent years,” Mathon wrote in a statement to 29News. “RGGI funding has been a game changer and enabled each of these projects to move forward.”

Kristel Riddervold, the Director of the City of Charlottesville’s Office of Sustainability, says the City received about $800,000 towards flood resilience, which she says helped cover a range of things as rain events become more frequent and more intense.

“Everything from education and awareness to very technical infrastructure projects,” Riddervold said.

But of course, all of this comes at a cost, one that Republican State Senator Luther Cifers, who voted “no,” says is untenable.

“RGGI is a tax on energy,” Cifers told 29News. “It’s a new revenue stream, a new funding mechanism for projects that politicians care about...You end up creating an even more expensive, even more overbearing government.”

Dominion Energy confirmed with 29News Tuesday that the rider associated with being part of RGGI translated to about an additional $4.40 per month for ratepayers. A spokesperson for Dominion tells 29News that it’s too early to know what the future cost would be if Virginia rejoins, as that will depend on the auction price of carbon allowances at the time.

“Everybody I know wants clean energy, but there’s a limit to how fast we can get there and how much every family in Virginia ought to be asked to pay every month,” said Republican Senator Mark Obenshain, also a “no” vote.

Obenshain also points to RGGI as what he calls a contradiction of state Democrats’ affordability mantra.

“I don’t think it’s enough to talk the talk, you’ve got to walk the walk,” Obenshain said.

It’s not only lawmakers who are concerned about the likelihood of rejoining RGGI. The CEO of the Virginia Chamber of Commerce sent the following statement to 29News:

“The Virginia Chamber acknowledges the importance of energy resiliency and environmental stewardship, but has raised concerns that rejoining the Regional Greenhouse Gas Initiative (RGGI) would effectively impose additional costs on electricity consumption, negatively impacting affordability,” that statement reads. “With many of Virginia’s major competitor states not participating in RGGI, the Chamber cautions that such costs could have implications for the Commonwealth’s economic competitiveness and business climate.”

Jaffe says the concern over ratepayer costs, though, should be a debate that is isolated from the question about whether Virginia should be part of RGGI.

“At some level, environmental compliance costs are something that utilities should have an incentive to mitigate...as much as they can,” Jaffe said. “How much of that compliance cost should be borne by company shareholders versus how much should be borne by electricity customers, I think that’s a separate question.”

CORRECTION: A Dominion spokesperson has clarified that they cannot estimate any future costs because of the market-based nature of the system.

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