On Behalf of the Sierra Club Virginia Chapter with nearly 20,000 members:

As recognized in the Proposed Regulation Agency Background Document, I previously
submitted comments urging DEQ and the Air Pollution Control Board to reject withdrawal from
the Regional Greenhouse Gas Initiative (RGGI).
I will not repeat all the arguments I made previously. Rather I incorporate them by reference
since they remain valid and since DEQ’s responses said nothing that would refute arguments
made by opponents, including my arguments.
I do, however, add a few points to my earlier comments.
First, DEQ’s proposed regulation would unlawfully repeal regulations that implement
legal requirements enacted by the General Assembly in 2020 and implemented by the APCB
based on the clear direction of the legislature. The 2020 enactments provide dedicated funding
for efficiency and resiliency programs that DEQ concedes are necessary. They also provides
rice-based financial incentives to encourage utilities and users to switch to less harmful solutions
to the generation and consumption needs. DEQ’s assertion that “we disagree” with the statutory
policies and requirements is not a legitimate basis for repealing the existing regulations and
overriding the law as written.
The law may allow some flexibility for DEQ to choose among carbon pricing systems, but no
pricing system other than RGGI has been identified and creating a gap while DEQ looks for one would be unlawful. It cannot lawfully eviscerate applicable laws to address climate change and
needed responses based on the current administration’s policy beliefs that conflict with
enactments by the General Assembly. Yet, the proposed regulation would effectively overturn
the law, thereby eliminating legislation that creates a dedicated funding stream to address the
problems and eliminating the price incentives to accelerate the shift from climate-damaging
fossil fuels to zero-carbon energy sources, zero-fuel-cost energy sources and to energy demand
reduction through energy efficiency. DEQ claims to believe that there are better solutions, but it
identifies none and proposes none. Adoption of its proposal would be unlawful and an abuse of
discretion.

Second, the Proposed Regulation Agency Background Document confirms the
arbitrariness and unlawfulness of the proposal. As that Background Document repeatedly
acknowledges, regulatory to address “serious threat” of climate change by reducing carbon
emissions and other harmful co-pollutants is “indeed imperative,” “necessary,” “essential,”
“important” and “must be addressed.” It repeatedly acknowledges the harms to human health
and other values from global warming, sea level rise, heating and related air pollution. That
Background Document also confirms that “[e]nergy efficiency programs and resiliency measures
are indeed needed throughout the state,” “[e]nergy and resiliency are indeed important concerns
that must be addressed,” and “these types of projects are important for protecting the public
health and welfare,” including protection of people, places and natural resources.
.

Third, as reaffirmed since the Proposed Regulation Agency Background Document was
issued, damages from climate change have gotten worse in the U.S. and around the world and the
harms are accelerating. The chances of mitigating those growing impacts declines the longer we
delay cutting emissions of carbon and other greenhouse gas emissions. This was reaffirmed again
this month by the IPCC. https://www.ipcc.ch/report/ar6/syr/ The acceleration of harms in the
U.S. is illustrated by NOAA’s latest report showing the large increase in the annual number of
“billion dollar” weather events. (https://www.ncei.noaa.gov/access/billions/) . “In 2022 [the
third worst year], there were 18 weather/climate disaster events with losses exceeding $1
billion each to affect the United States…. Overall, these events resulted in the deaths of 474
people and had significant economic effects on the areas impacted. The 1980–2022 annual
average is 7.9 events (CPI-adjusted); the annual average for the most recent 5 years
(2018–2022) is 17.8 events (CPI-adjusted).” Last year, the costs exceeded $350 billion in the
U.S..
Fourth, DEQ’s claims about harms to ratepayers from RGGI participation are
disingenuous. (a) Comparing the centuries of years of harms and billions of dollars of likely
damages to Virginia and its residents from global warming to a possible $2.36 monthly rate
increase is ludicrous. (b) Such claims are particularly misleading and indefensible, since (i)
RGGI-funded efficiency programs will directly reduce energy usage and costs for low-income
customers; (ii) RGGI will provide all customers and the utility incentives and to switch to greater
energy efficiency and cleaner fuels; (iii) the latest legislation emerging from this year’s GA is
expected to significantly reduce the largest utility’s rates for residential customers; (iv) EIA
reports that the market price for natural gas has fallen by 70% in the past 6 months; (v).shifting
to more efficiency and zero-carbon energy will shield customers and utilities from the inevitable
gyrations of fossil fuel prices and the fact, (vi) zero-carbon energy is cheap compared to direct
and indirect costs of other fuels.
Fifth, the assertion in EO9 that “the benefits have not materialized” is misleading, at best. Virginia only
began participation in RGGI in 2021. Changing utilities’ generation and purchases takes time and could
not possibly be fully achieved in the first few years. Beyond that, the law requiring participation in a
carbon market, has already successfully provided funding of resiliency and efficiency programs,
which the Background Document concedes are essential. With RGGI-driven incentives,
Virginia has added over 3000 MW of solar capacity since enactment, it has doubled solar energy
production from 2020 to 2021; and SEIA projects growth of 5,757 MW of new solar over the
next five years. It takes time for utilities to respond to incentives but the goals of the RGGI-
related legislation are clearly materializing, as the legislation intended.
In sum, the Proposed Regulation should be rejected. DEQ and the Board lack authority
to withdraw Virginia from RGGI. Doing so violates the terms of the law and the repeated
acknowledgment of the essential need to reduce carbon and related pollution while also
promoting greater energy efficiency and climate resiliency. Adopting the proposal would, at
best, be an arbitrary abuse of discretion. It would so would kill – without any replacement – the
legislated forms of dedicated funding to address the problems and eliminate the price incentives
to accelerate the shift from climate-damaging fossil fuels to zero-carbon energy sources, zero-
fuel-cost energy sources and to energy demand reduction through energy efficiency.