State official tells regulators RGGI repeal process is imminent
Virginia’s acting Director of Natural and Historic Resources, Travis Voyles, addressed the state Air Pollution Control Board on Wednesday to reiterate the wish of Gov. Glenn Youngkin to pull Virginia out of the Regional Greenhouse Gas Initiative. He also announced a goal of leaving the program by late 2023.
The emissions cap-and-trade program limits carbon allowances available to member states, reducing the amount of emissions allowed over time. It’s been a central issue for Youngkin since the campaign. In his ninth executive order, issued during his first week in office, Youngkin directed the Department of Environmental Quality to reconsider the economic impact of RGGI on Virginia ratepayers.
Voyles told the board that in the coming weeks, DEQ would start the process of leaving RGGI through a repeal of the regulation confirming Virginia’s membership. The process would include numerous meetings and public comment opportunities, and the administration expects it to be completed by the end of 2023, when Virginia’s current contract with the multi-state program runs out.
Voyles’s presentation echoed comments made by administration officials during the past several months.
“RGGI costs are being passed on to Virginia consumers as a tax without incentivizing any change in behavior by the electricity providers, all due to Virginia’s regulatory structure and program implementation,” Voyles said.
He noted that an earlier version of the regulatory approval for entering RGGI would have sent some of the money generated by RGGI back to ratepayers, but the General Assembly changed the structure of RGGI-funded programs while negotiating legislation.
Voyles also focused on the creation of a “RGGI rider,” a monthly surcharge for Dominion customers that covers the carbon emissions allowances the utility purchases in quarterly auctions. A RGGI rider of $2.39 for a residential customer using 1000 kWh in a month was in place until July 2022. It was expected to continue rising, but Dominion pulled the surcharge in anticipation of Youngkin’s effort to leave the program. The utility now recovers the costs from base rates.
Some board members questioned the decision to pull Virginia out of the program. Dr. Lornel G. Tompkins argued that RGGI's implementation in Virginia could be changed by state lawmakers.
“It ... seems that based on what you have said, that a lot of the issues with RGGI are based on the General Assembly’s direction,” Tompkins said.
Stacy Rijal agreed with Tompkins and argued that increasing energy costs are a function of national and global factors, not the state’s involvement with RGGI.
“Someone’s gonna have to pay for it,” Rijal said. “Rising costs are not gonna be solved just by this one action.”
Voyles said the administration is “working with the mechanisms we have right now” to reduce rates.
Tompkins, Rijal, member Hope Cupit and several climate advocates speaking in a public comment period also asked about how the administration plans to replace money generated by RGGI auctions that’s earmarked for energy efficiency upgrades for those who can’t afford them and flood mitigation grants for communities like Norfolk and Buchanan County.
Voyles said the state can find funding for programs like those elsewhere, and that it shouldn’t rely on RGGI for them.
“We are working on that,” Voyles said.
Other board members were supportive of the proposal, saying high electric rates would harm Virginia’s status as a great state for business.
“I think that we have to take a hard look because at the end of the day, industry provides the jobs,” said member David Hudgins.
The board also elected new leadership, signaling a shift in power from members appointed by former Gov. Ralph Northam to the newer Youngkin appointees. James P. Guy II and Jay Holloway were elected chair and vice chair respectively.
The reorganized board carried out two actions ordered by the General Assembly, the first of which exempted businesses in the aerospace and aviation industries from a ban on emitting hydrofluorocarbons. HFCs are generally used in refrigeration, air conditioning and aerosols. They replaced chemicals that greatly depleted ozone in the atmosphere but are now considered to be high-potency greenhouse gases by the Environmental Protection Agency.
The board also fulfilled a legislative directive to forfeit permitting power to DEQ, an action which some environmentalists told VPM News will make the process easier for companies seeking controversial permits. Those permits will still be subject to public comment requirements.
The new leadership of the board opted not to schedule any meetings of the unofficial public engagement subcommittee, which held additional board meetings and took public comment in parts of the state impacted by permits or regulations being considered.