RGGI Helps Virginians Benefit From Inexpensive, Clean Energy
2021 was Virginia’s first year participating in the Regional Greenhouse Gas Initiative; the state pulled in a total of $227.6 million in the first 12 months.
Governor-elect Glenn Youngkin said last month he would use his executive power to take Virginia out of RGGI when he becomes governor.
Through funding energy efficiency upgrades for low-income individuals and incentivizing the use of renewable energy, RGGI helps make energy cheaper and cleaner in Virginia and should be preserved.
Early last month, Virginians found out that the state brought in $227.6 million in revenue in its first year of participation in the Regional Greenhouse Gas Initiative. That news came after it was revealed that the final carbon auction of 2021 was the most lucrative one yet for Virginia, pulling in $85.6 million. Virginia’s participation in RGGI appears to be off to a strong start, with the year’s RGGI funds surpassing initial Department of Environmental Quality estimates by over $100 million.
But just days after this good news was made public, Governor-elect Glenn Youngkin announced he would use his executive power to pull Virginia from the regional program. Youngkin characterized RGGI, which the Democratic controlled 2020 General Assembly voted to join, as a tax on electricity ratepayers.
“RGGI describes itself as a regional market for carbon, but it is really a carbon tax that is fully passed on to ratepayers,” Youngkin said in a speech. “It’s a bad deal for Virginians. It’s a bad deal for Virginia businesses.”
Thanks to an SCC ruling made in August 2021 allowing Dominion Energy to recover RGGI costs via ratepayer bills, Youngkin is partially correct in saying that costs are being pushed onto certain Virginians, namely Dominion customers. But with RGGI funds being allocated to flood preparedness programs and energy-efficiency upgrades for low-income Virginians — all while incentivizing the cleaner production of energy — it’s hard to understand what makes RGGI a bad deal for Virginians.
A cap-and-trade program, RGGI requires power producers to purchase carbon allowances at quarterly auctions equal to each ton of carbon their product emits. This causes carbon-emitting energy production to become more expensive during a time in which renewable energy options are cheaper than ever. For this reason, RGGI is appealing for Virginia considering the state is working toward achieving a carbon-free electric grid by 2050. Currently, Virginia is one of just 11 states participating in RGGI.
While the SCC’s decision to push the cost of Dominion’s carbon allowances onto Dominion ratepayers will increase Dominion electric bills by $4.84 each month, electricity will not become more expensive for all Virginians because of RGGI. In fact, half of Virginia’s RGGI funds are allocated to the Department of Housing and Community Development, which will use the money to provide energy efficiency upgrades for low-income individuals. Energy efficiency upgrades mean less energy used, which in turn means lower electric bills. For those benefiting from these upgrades, RGGI is not an electricity tax, but rather a means to save money on energy bills.
Furthermore, Virginia’s participation in RGGI incentivizes the use of renewable energy in the state. A majority of Virginians support the transition to a cleaner energy landscape in Virginia, and RGGI is helping to make that future a reality. Clean energy, fueled by renewables, is already becoming a major business in Virginia, with 93,000 working in the state’s clean energy industry. These jobs come with living wages and strong benefits that support Virginia’s families. A carbon-free future is not only the economical choice, it’s also popular. Continued participation in RGGI will help Virginia get there.
Youngkin is right to be concerned about the cost of energy in Virginia. But pulling out of RGGI is the wrong way to address that concern. RGGI helps those most in need save on energy bills while incentivizing the use of less expensive renewables. The cleanest, most economical choice is to keep Virginia in RGGI.