Virginia Regulatory Town Hall
Department of Environmental Quality
Air Pollution Control Board
Regulation for Emissions Trading [9 VAC 5 ‑ 140]
Action Repeal CO 2 Budget Trading Program as required by Executive Order 9 (Revision A22)
Comment Period Ended on 10/26/2022
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10/26/22  5:52 pm
Commenter: Elinor Schwartz

Keeep Virginia in RGGI

In 2020 Virginia’s General Assembly passed and Governor Ralph Northam signed HB 981 (Chapter 1219), the Clean Energy and Community Flood Preparedness Act. This legislation authorizes the State to join the Regional Greenhouse Gas Initiative (RGGI). After careful consideration, the State chose this proven, cost-effective approach to address climate change, the existential issue of our time. RGGI, a 12-State, market-based compact, auctions electric power sector carbon dioxide (CO2) allowances to reduce CO2 emissions. This compact comprises all of the New England and Mid-Atlantic States.


On his first day in office on January 15, 2022 Governor Glenn Youngkin began a process to withdraw the State from RGGI though his Executive Order Number Nine. The State Air Pollution Control Board issued a Notice of Intended Regulatory Action (NOIRA) on September 6, 2022 with the intent to repeal Part VII of 9VAC5-140 in its entirety. The most viable and least intrusive alternative to Governor Youngkin’s proposed repeal is to continue Virginia’s full participation in RGGI for the reasons below:


A Significant Number of General Assembly Members State That Only a New Law Can Change State Participation in RGGI

On September 8, 2022 more than a third of the General Assembly (61 members) signed a letter to Members of the State’s Air Pollution Control Board to express their continued support for Virginia’s participation in RGGI under the Clean Energy and Community Flood Preparedness Act. They stated that Virginia can only be removed from RGGI by another law passed by the General Assembly and signed by the Governor, not by a proposed regulation, emergency regulation, regulatory act or any subsequent administrative process. A Richmond Times-Dispatch article on May 13, 2022 reports that an unreleased document provided by Attorney General Jason Miyares’ office to Air Board member Hope Cupit in March 2022 generally agrees with this assessment.


Membership in RGGI Has Already Generated over $450 million in Critical Benefits

This regional cap-and-invest initiative has already generated over $450 million for Virginia during 2021 and 2022. It invests State funds designated by State law: 50 percent for energy efficiency programs for low-income areas, 45 percent to address recurrent flooding, sea level rise and flooding from severe weather events and 5 percent for administration.


Global Energy Markets are a Major Factor in Utility Bills

Governor Youngkin holds RGGI responsible for rising utility bills. Aside from ratepayer usage, fossil fuel costs reflected in utility bills are a consequence of the supply and demand of world markets, driven in part by production quotas of other producing nations. OPEC+, an alliance of the Organization of the Petroleum Exporting Countries (OPEC) and others led by Russia, have acted to limit production. Domestic economic recovery also has affected demand.


Energy efficiency upgrades under HB 981 are an effective way to lower utility bills. They are directed to those in low-income areas most in need.


Personally, 7 of my monthly Dominion Electric residential electricity bills this year included a rider for RGGI among 7 riders and charges. This particular rider ranged from $0.18 to $0.61 per bill and amounted to 0.5 percent to 1.5 percent of the electrical portion of each affected bill. I consider this a truly insignificant expense in exchange for a cost-effective approach to climate change.


RGGI Demonstrates Cost Savings

Though various factors play a role, RGGI demonstrates energy cost savings and it has not had negative economic consequences for participating States. According to the Acadia Center’s 2019 10-year review of RGGI, between 2008 (the year before the program launched) and 2017, electricity prices in RGGI States fell by 5.7 percent, while prices increased by 8.6 percent in the rest of the country. The Center for Climate and Energy Solutions found a net economic benefit of $4.7 billion for RGGI States between 2009 and 2017 from the cap-and-trade program.


RGGI Balances Independent State Decision-Making with Overall System Performance

As a compact participant, Virginia has influence on the operation of RGGI, which in turn benefits the State. The General Assembly specified the low-income energy-efficiency program and Virginia Community Flood Preparedness Fund as recipients of auction proceeds in HB 981.


The State’s Air Pollution Control Board created its own extensive, independent regulations (9VAC5-140) based on the RGGI Model Rule framework enabling Virginia to participate in regional CO2 allowance auctions. This framework identifies standards for allowance auctions, the Allowance Tracking System and the eligibility of offset credits. These are reasonable tradeoffs in a cooperative trading system that also provides great flexibility and self-determination to the State.


RGGI States continue to evaluate and improve this cooperative program. They are currently engaged in their third program review, which began in 2021 and which is expected to conclude in December 2023.


RGGI Has Helped to Lower Emissions

NRDC has found that Virginia’s power plants emitted 13 percent less carbon in 2021 compared to 2020. The Acadia Center’s 2019 10-year report on RGGI stated that CO2 emissions from RGGI power plants fell by 47 percent from 2008 to 2018, outpacing emission reductions in the rest of the country by 22 percent. RGGI is a contributing factor, though lower costs for natural gas and renewable energy are additional factors.



CommentID: 201087