Members of the Air Pollution Control Board
c/o Karen G. Sabasteanski

1111 East Main Street, Suite 1400
P.O. Box 1105
Richmond, VA 23218

Karen.Sabasteanski@deq.virginia.gov

March 30, 2023

Dear Members of the Air Pollution Control Board:

Advanced Energy United and its members (“United”) thank Virginia’s Air Pollution Control Board (“Air Board”) for the opportunity to comment on the proposed repeal of Virginia’s participation in the Regional Greenhouse Gas Initiative (“RGGI”). United is the only industry association in Virginia to represent the full range of advanced energy technologies and services, both grid-scale and distributed. This definition includes energy efficiency, demand response, energy storage, wind, solar, hydro, nuclear, electric vehicles, and more. Within the Commonwealth, the advanced energy industry employs over 97,000 workers.[1]

United fully supports the intent of the Commonwealth, as embodied in the energy priorities enacted by the General Assembly, to achieve more secure, clean, and affordable energy for all Virginians. RGGI is an important policy mechanism to achieve these objectives. Using a free-market structure, this program aims to steadily reduce emissions from power plants in the region and shift our grid towards cleaner, cost-effective generation in the most economic means possible. Thus, we urge the Air Board to review the Governor’s Executive Order and reject any proposal that would repeal or otherwise impede Virginia’s participation in RGGI.  We agree with our allies, including, but not limited to, the Virginia Energy Efficiency Council and the Virginia Conservation Network, that the executive branch cannot override the statutory mandates and regulations that created the RGGI programs. This is because the RGGI program for Virginia was created along with its mandates by Virginia’s General Assembly in law. These laws did not give the executive branch authority to direct the state’s participation in RGGI. Thus, the power still resides with the General Assembly to oversee RGGI programs and the related agreements that allow Virginia to participate in its auctions. We likewise support Virginia’s continued participation in RGGI for the multiple ways in which it catalyzes greater energy efficiency throughout the state. This occurs in two ways. First, by limiting the emissions credits being auctioned within Virginia under RGGI, the program compels utilities and other buyers of carbon credits. As the supply of credits falls, and prices rise, the market encourages buyers to utilize the least-cost means of reducing emissions, so they pay for less credits. Often, the least cost emissions reduction strategy lies in reducing energy consumption through efficiency.  Second, by statute, fifty percent of proceeds from RGGI auctions go directly into low-income energy efficiency and weatherization programs. Furthermore, by statute, these funds must be used for these efficiency programs and not revert to the general revenue fund.[2]

Even if we set aside the broader market impact of RGGI (i.e., shifting utilities towards lower-cost, clean generation), the infusion of funds from Virginia’s participation in RGGI is already having an immediate, beneficial effect on the deployment of energy efficiency. In the first two years of participation, RGGI has generated $252 million in new resources for efficiency investments.[3]  According to the Virginia Energy Efficiency Council, continuous participation in RGGI through 2030 will result in an estimated total revenue of $2.5 - $3.3 billion, resulting in between $125 - $165 million per year for low-income energy efficiency programs. They predict a statewide economic impact of between $2.03 billion and $2.67 billion.[4]

The best part of this economic impact is that the dollar earned must be spent within the state on weatherization and energy efficiency projects, such as new roofs, HVAC systems, and electrical work.[5] These projects by their very nature must be done on-site on homes and within other housing projects. As these resources are directed towards low-income communities, they represent investments that would not otherwise occur, given the limited resources of residents. Such investments not only help these communities reduce their acute energy burden but also generate additional emissions reductions by reducing demand for electricity and fossil fuels used for heating.

Another benefit of these dollars being spent on Virginia-based projects is the jobs they create for Virginians. This includes installers, inspectors, auditors, and a host of other positions that make up the job pool that is necessary to make homes more efficient and weatherized. These jobs cannot be outsourced. According to a recent study, there are some 73,000 jobs alone in energy efficiency work in Virginia.[6] While according to the Virginia Energy Efficiency Council, these RGGI programs alone are helping to create and sustain up to 2,115 new jobs.[7] 

Finally, is the impact that RGGI has on the lives of everyday Virginians. RGGI dollars go directly into the pockets of Virginians beyond what is received through wages and new jobs. Presently, 164,000 Virginia households living below the poverty level pay about 31% of their income on energy costs, and another 179,000 pay about 17% of their income.[8] With numbers like this, energy efficiency projects are key to bringing down these high costs. Additionally, weatherization projects alone are predicted to lower families’ electricity bills each year by $976.[9] With such high numbers and affected persons, savings created by RGGI dollars are a huge win for Virginia’s hardworking families.

In conclusion, the RGGI dollars are a game-changer for Virginia’s working families. The dollars are a substantial economic impact for the state. They create sustainable, growing jobs that cannot be outsourced. They also directly lower the impact of energy prices on Virginia’s working families, especially on those that need it the most. Given these significant benefits, the role RGGI plays in helping the Commonwealth realize its energy goals, and the underlying legal dynamics, we urge the Air Board not to withdraw Virginia from this Initiative.

Sincerely,

[2] VA. CODE ANN. § § 10.1-1330