This story was reported and written by VPM News.
Virginia's government is nearing completion of a yearslong 360 — the commonwealth will rejoin the Regional Greenhouse Gas Initiative less than three years after leaving through amendments Gov. Abigail Spanberger signed to the state budget.
The new language requires the state Department of Environmental Quality to file regulations within 90 days that will return Virginia to RGGI, the multi-state emissions pact. That 90-day clock started ticking Feb 20.
RGGI has been a hot topic since former Gov. Ralph Northam was in office.
The initiative functions by selling a limited number of carbon allowances to power producers and other parties. Over time, the pool of allowances shrinks, increasing their cost and, in theory, encouraging producers to switch to cheaper renewables.
Republicans have long criticized the program, with former Gov. Glenn Youngkin calling it a regressive tax levied through electricity bills. Currently, they use Democrats' support of the measure as a sign that they are not as serious about affordability as they let on.
"That is a tax on Virginians – tax every time they pay their energy bill," state Sen. Ryan McDougle (R–Hanover) said during a press conference last week.
Virginia was a full member from 2021 to 2023, when the Youngkin administration left the program. That action has since been ruled illegal. Over 12 quarterly auctions, the state brought in $827.7 million, according to RGGI, Inc. records.
That total comes from proceeds of carbon allowances purchased by Dominion Energy, independent power producers and others. In Dominion's case, the costs of their allowances were directly covered by bill riders — additional costs tacked onto customer bills, as approved by state regulators.
When Virginia left RGGI, Dominion stopped charging that rider, saving "typical" residential customers (those using 1,000 kilowatt hours per month) an estimated $4.43 each month. While it was being charged, that covered ongoing costs to participate in the program, as well as some earlier deferred costs — Dominion temporarily stopped charging the rider while Virginia was still a member.
The proceeds were split between two major state programs, which Democrats want to reinvigorate.
One program lowers bills of individual Virginians by funding deferred weatherization work. Improved appliances and insulation can greatly reduce monthly electric bills, and federal funding pots already exist for people who can't afford such work. But that funding isn't available to everyone who needs it, especially if their homes are deemed to have underlying safety issues that prevent efficiency upgrades.
Virginia's RGGI-funded weatherization pot filled that gap, which weatherization professionals say is essential. The Association of Energy Conservation Professionals sued the Youngkin administration over its move to leave RGGI.
The other program distributed RGGI funds to localities all around the state to implement flood management and prevention measures, with the intent to counter torrential summer downpours that will become increasingly damaging as global climate change raises the temperature in Virginia.
House Majority Leader Charniele Herring (D–Fairfax), is carrying a bill intended to serve as a "belts-and-suspenders" measure against future attempts to leave the program. She said those benefits are often not considered by critics of RGGI's bill impacts.
"It's actually going to decrease costs for energy in the long term for low-income consumers," Herring said. "There are benefits from the reduction of carbon emissions."
Del. Jackie Glass (D–Norfolk) said during a January subcommittee hearing on the bill that she understands the cost concerns of Republicans and customers, and called on them to make proposals that could soften those costs.
"I'm hoping that in this work, that you all step forward when we start trying to make ways that those things don't get passed on … to our customers," Glass said.
McDougle said he would be open to considering changes to reduce bill impacts, including proposals to put some costs on utility shareholders rather than ratepayers, but reiterated his opposition to rejoining the program.
"The bill in front of us is whether Virginians will be taxed on their energy bill every month and pay more, and we're against that," McDougle said before the vote on the budget amendments.
Herring said she's not aware of discussions on any such proposal and is focused on getting things back to "where we were before we were illegally taken out."
It's not clear exactly when Virginia power producers will have to begin purchasing carbon credits through the program again, but it's expected to happen before the end of the year.
Disclosure: Dominion Energy is a VPM sponsor.
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