Virginia is poised to reenter the Regional Greenhouse Gas Initiative this summer, a move that could again add a monthly charge to electricity customers’ bills as utilities resume buying carbon credits.
State officials expect the commonwealth to participate in the program’s September auction once regulations to reestablish the CO2 budget trading program are finalized. Dominion Energy plans to petition the State Corporation Commission in June to add the cost of those credit auctions back onto ratepayer’s bills.
The Department of Environmental Quality and the Department of Natural and Historic Resources are working to complete the regulations before the May 21 deadline laid out in the legislation passed by the General Assembly.
“Our intention is that we will formally be participating in the Regional Greenhouse Gas Initiative effective July 1 of this year,” DEQ Deputy Director Jonathan Rak said.
Virginia began participating in 2021 auctions that require utilities to purchase carbon emission credits when they exceed caps set by RGGI Inc., a program now involving 10 other states.
Former Gov. Glenn Youngkin removed Virginia from the agreement in 2023, calling it a hidden tax on ratepayers. The program costs an estimated $2 a month for residential customers in Dominion’s territory. A court later ruled that the removal was unlawful, and when he took office, Attorney General Jay Jones canceled the appeal of that ruling.
The cost of the credits has increased since the state last participated in RGGI, but it is not yet clear how that could financially impact ratepayers.
“I can certainly confirm that the prices have increased,” Rak said. “They’re obviously determined in the auction, but we don’t have a prediction at this point as to what the numbers will be.”
In 2027, the cap for carbon emissions under RGGI is also set to decline, as part of ongoing efforts to reduce greenhouse gas emissions. This could further increase costs for utilities working to meet mandates under the Virginia Clean Economy Act while still relying on fossil fuels to generate sufficient power.
Dominion said the cost of the “Rider RGGI” on bills will be detailed in its June filing to the SCC.
Virginia received over $800 million during the three years it participated in the program. Revenue from the fall auction allocated to Virginia will be returned to the fund and distributed as follows: 50% for low-income energy efficiency programs, 45% for the Community Flood Preparedness Fund, and the remainder for climate change planning and administrative costs.
