|Action||Repeal CO 2 Budget Trading Program as required by Executive Order 9 (Revision A22)|
|Comment Period||Ended on 3/31/2023|
NRDC Comments, cont. (part 2 of 2)
B. Legal Basis section (p. 4, Agency Background Document).
C. Purpose section (p. 4).
D. Issues section (p. 5).
The SCC is Virginia’s designated entity charged with ensuring that Virginia ratepayers receive utility services at “just and reasonable rates.” And that includes any compliance costs associated with the RGGI trading program, as well as all other environmental compliance costs that have long been a regular, ongoing function of providing electricity from state-regulated utilities (e.g. longstanding compliance costs from the sulfur dioxide trading program, the nitrogen oxide trading program, water pollution standards, coal ash remediation, particulate matter standards, etc.). There is nothing new or unique about oversight by the SCC of ensuring the lowest possible environmental compliance costs, to minimize the impact on total energy costs.
If, in the specific case of RGGI, Dominion fails to prudently and economically reduce emissions under RGGI by increasing its energy efficiency and low-cost carbon-free resources, and instead continues to expose Virginia ratepayers to high fossil fuel costs, then it is up to the SCC to address these “energy costs” and determine whether the utility should indeed be able to recover them, if imprudently incurred. Indeed, Virginia law explicitly requires that Dominion’s energy costs may be deemed recoverable by the SCC only if they are proven to be prudently incurred and not the result of the utility’s unreasonable failure to minimize such costs. If the DEQ is concerned about energy costs, its appropriate venue is to intervene or otherwise participate in a cost-related case at the SCC, not to attempt to impact economic matters by tampering with standing air pollution law.
Virginia law is clear that “energy costs” are the province of the SCC, and DEQ is arbitrary and capricious to cite such consumer costs as a primary “issue” for an air agency to address.
E. Agencies, Localities, and Entities Particularly Affected section (p. 5).
F. Economic Impact section (pp. 6-7).
G. Alternatives to Regulation section (p. 7).
H. Regulatory Flexibility Analysis (p. 7).
Due to the above defects, the NRDC therefore again respectfully requests that the Air Board return the proposed repeal to DEQ for additional consideration of the below comments and withdraw the proposed repeal. At a minimum, the proposed repeal should be deferred until a lawful basis is articulated in accordance with the APA and prior to any adoption. As currently drafted, the proposed repeal is unlawful on its face and will result in costly and unnecessary litigation, disruption in the trading market, and termination of vital public health and community benefits in the form of both energy efficiency and flood-prevention funding, and lower air pollution.
NRDC Virginia Policy Director & Senior Attorney