By Steve Haner
Grapevines sequester carbon dioxide so climate activists alarmism Virginia who pulled the cork without guilt today, after learning that a Virginia circuit court judge will order Virginia to rejoin the Regional Greenhouse Gas Initiative (RGGI).
During the three years Virginia was part of the multi-state cap and tax compact, Virginia collected $828 million from electric power producers that applied for permits to emit CO2. The state’s largest payer, Virginia’s Dominion Energy, only pays the cost to consumers dollar for dollar with their monthly bills.
The judge’s final order has not yet been made so the details of any relief to be ordered are not finalised. But there Floyd County Judge C. Randall Lowe circulated a letter of opinion stating that he agreed with RGGI boosters that only the Virginia General Assembly can pull the state out of the compact, based on the reading of the 2020 rules.
It is the position of Republican Governor Glenn Youngkin and Republican Attorney General Jason Miyares that the statute is permissive but not mandatory. Both sides issued brief statements today disagreeing with the judge’s order and vowing to pursue an appeal to the Virginia Supreme Court. Of course he will also ask the top court to stay the order, but that motion may be rejected.
The case resides in rural Floyd County because it is the home base for an association of energy efficiency renovation contractors, the only original plaintiff in the case.
Of course, whoever wins at the circuit court level faces an appeal. And it is still true that the real decision about the future of RGGI in Virginia will depend on the 2025 election, the next governor and the upcoming General Assembly. If this decision stands and Virginia is in the RGGI when the new governor comes in, only the trifecta of Republicans will overturn it again.
The exit from RGGI was a promise of the Governor at the beginning of his term in 2021, but it took two years to complete. At the urging of the Governor, the Air Pollution Control Board voted in the summer of 2023 to exit RGGI at the end of the current contract period in December 2023.
The judge has declared that the council’s vote to revoke is invalid, illegal, without effect. These regulations remain in effect. That means it is illegal for the state not to force electricity generators to buy and spend RGGI credits for this year. He asked lawyers for the plaintiffs in the case to draft a final order outlining what would happen next. Could it include some compensation for lost RGGI 2024 revenue, maybe around $400-500 million?
why not The case was brought by a group of energy conservation contractors who were paid to retrofit homes for energy efficiency. He argued (correctly) that his decision to leave RGGI ended meal tickets and would reduce activity and income. Loss of money is the damage suffered, and money is a logical part of any relief. That RGGI is hardly the only source of revenue for these programs is not a problem. The judge ruled that the money was confiscated illegally.
On the other side of RGGI’s ledger, locals and contractors who do work to prevent or mitigate flooding also lose jobs and money. He gets the other half of the RGGI tax dollars collected between 2021 and 2023. He is not involved in the case, but if financial reparations are ordered, he will comply.
The RGGI agreement between the states occurs on a three-year cycle, and Virginia missed the start of the 2024-2026 contract period. The other RGGI states will say whether, when and under what conditions Virginia rejoins the confederation. Virginia’s return will also have an impact on the price of allowances, carbon tax.
RGGI has been a political yo-yo in Virginia for decades. Governor Terry McAuliffe started the process by asking the Air Council to adopt RGGI member regulations. No action of the General Assembly directs Virginia to RGGI. Conversely, Republican legislators at the time passed bills requiring Assembly approval, and Democratic governors vetoed them. But Republicans could block RGGI by denying funding for its implementation.
The game came to a screeching halt when Democrats won the trifecta of control in Virginia in 2020. Suddenly the Assembly’s actions mattered most. It is the 2020 legislation that also dictates the use of RGGI funds for weather and flood control, creating a powerful constituency to maintain revenue streams. It will soon be a flood of revenue.
As reported by Bacon’s rebellion previously, in the months since Virginia left the compact, the price for each ton of carbon emissions has risen dramatically. A new record could be set in the last auction of 2024 in early December.
In 2023 Dominion charges each customer, residential and business, the same $4.43 per 1,000 kilowatt hours. A good guess would be that if the tax remains in the bill for 2024, it will rise to at least $5 or more per 1000 kwh for this year. Dominion uses the example of 1000 kwh as a “typical” bill but many, many residential customers use more than that each month, and thus will see more than $5-6 in their electric bill. Often those big bills come down to small, but poorly insulated, homes with poor heating systems.
As for what the tax will be for 2025, given the increase in the price of carbon in the auction, can Dominion have an estimate if they want to show that. Can it reach $7-8 per 1,000 kwh? In Virginia’s first auction in 2021, the carbon tax was $7.60 per ton and in the latest auction – less than four years later – it has risen 240% to $25.75 per ton.
There are no price projections in Dominion’s latest integrated resource plan that assumes it will impose an RGGI carbon tax on its hydrocarbon generation fleet over the next 15 years. And in the case of that IRP, it will be independent grow up hydrocarbon generation fleet, given the plan to add 6 gigawatts of natural gas generation.
An old saying in Richmond is a statute means what the judge says. The first of what could be some judges have said.
Related
