Youngkin withdraws from costly RGGI contract and could face a legal challenge

(JHe Center Square) – Governor Glenn Youngkin’s administration will use its regulatory authority to end Virginia’s participation in an expensive carbon credit program.

The decision is likely to be the subject of a legal challenge by environmental groups who say the executive does not have the legal authority to do so.

The Regional Greenhouse Gas Initiative, also known as RGGI, is a multi-state pact that progressively reduces carbon emissions over several years in participating states. RGGI caps the amount of carbon emissions allowed in the state and imposes limits on individual entities. These entities must purchase a limited number of carbon credits if they are to emit more carbon, but the number of available credits decreases over several years. Exceeding the allowed carbon emissions would result in hefty fines.

Virginia entered the pact during the administration of former Governor Ralph Northam after the General Assembly passed a law authorizing it to do so. Most of the credits are purchased by the Commonwealth Energy Utilities and some of the costs are passed on to ratepayers. Between 2019 and 2043, the State Corporations Commission estimates that RGGI will cost nearly $6 billion and eventually result in rate increases of between $84 and $144 for the average taxpayer each year.

Youngkin campaigned to get Virginia out of RGGI and his administration is keeping that promise. In a statement, Acting Secretary of Historic and Natural Resources Travis Voyle said the administration would repeal the trade rule, which would end the Commonwealth’s participation in the pact.

“RGGI is bad business for Virginia and RGGI’s costs are passed on to Virginia consumers,” Voyle said. “To ensure that the Commonwealth pursues environmental protection, improvements in energy reliability and innovation, and the provision of affordable energy to consumers, there is a need to move away from the status quo and the path current energy policy that mandates a transition without considering the impacts. Given all of this and the fact that RGGI is a bad deal for Virginians, the administration will move forward with action to repeal the rule. business and terminate Virginia’s participation in RGGI.

Both the plan to leave RGGI and the process by which the governor intends to do so are controversial. Environmental groups and Senate Democratic leaders have said they don’t believe the administration can remove Virginia from the RGGI without going through the General Assembly, which could turn Virginia’s potential exit into a legal battle.

“RGGI has already proven to reduce pollution at the same time as it provides desperately needed resources,” Nate Benforado, senior attorney at the Southern Environmental Law Center, said in a statement.

“But instead of supporting this grassroots carbon pollution reduction program, the Youngkin administration has consistently sought to take illegal action to end Virginia’s involvement with RGGI — despite the fact that neither the governor nor the regulators don’t have the power to do that,” Benforado added. “Legislators who have that authority in the General Assembly know that RGGI is already providing real resources to Virginians on the front lines of climate change.”

Although the General Assembly authorized Virginia’s participation in the RGGI, some opponents of the pact have argued that nothing in law requires the Commonwealth to participate and that the administration can leave the pact if it wishes.

“I do not interpret the law as requiring Virginia to participate in the pact, or to impose this tax utility on customers,” said Stephen Haner, senior fellow for national and local tax policy at the open market Thomas Jefferson Institute. Center Square.

“If they wanted the bill to say that, they wrote it wrong,” Haner said. “But no doubt a judge in Virginia will get that question. Unfortunately, the full regulatory process will take at least a year and a half, which means Virginia’s energy costs will continue to include the RGGI tax for that period — likely an additional $500 million in six additional auctions.

In January, Youngkin ordered the Department of Environmental Quality to notify RGGI of the governor’s intention to step down, either through its regulatory authority or through legislation.