This story first appeared in the Virginia Scope Political Newsletter. Subscribe at the link below:
A transition aide to Glenn Youngkin says that the governor-elect and members of his transition team are concerned with the latest Regional Greenhouse Gas Initiative (RGGI) auction data that was recently was reported. RGGI is a market-based cap-and-invest initiative. Within the 11 states participating in RGGI, regulated power plants must acquire one RGGI CO2 allowance for every short ton of CO2 they emit. The RGGI states distribute allowances at quarterly auctions, where they can be purchased by power plants and other entities.
After joining the initiative in 2020 with 10 other states, Virginia made more than $227 million during the first year. Last week, the latest quarterly numbers were released showing Virginia bringing in $85.6 million.
The Virginia Mercury published a story on Monday about RGGI and how Democrats made it a priority and what the money is intended to be spent on. “The 2020 law authorizing Virginia’s participation in the market directed 50 percent of all auction proceeds to go toward low-income energy efficiency programs and 45 percent to go to a new Community Flood Preparedness Fund to assist communities and local governments affected by recurrent flooding and sea level rise. The remainder goes toward administrative expenses.”
Democratic lawmakers tout this bill, but they also quietly advanced legislation in 2020 to help certain utility companies in Virginia receive protection from this new law. The Virginia Mercury reported on this in February of 2020. “As Democrats bring home one of their top-line energy goals of the session, joining Virginia with the cap-and-trade Regional Greenhouse Gas Initiative, the caucus is holding firm against one company’s efforts to bring down its compliance costs even as it’s quietly cleared the way for two power producers to pay less.”
According to a transition aide for Youngkin, his team is looking at what options the future governor would have to address what they consider to be Dominion’s contributions to the higher cost of living in Virginia.
Virginia Mercury reported Monday that electric utilities are able to pass off the increased costs from the program to customers. “Nevertheless, amendments may be possible. Several of the state’s independent power producers such as LS Power have complained that the 2020 law unfairly preferences the electric utilities by allowing them to pass on the program’s costs to customers but not controlling compliance costs for non-utility producers with preexisting contracts. During the 2020 session, LS Power unsuccessfully fought for the addition of a provision to Virginia’s RGGI law that would cushion the amount such generators would pay for allowances during the term of their contracts. “‘Other states enacted such provisions to avoid creating an unfair competitive disadvantage for their home-state power generators,” wrote LS Power Media Relations Director Steven Arabia in an email. “With the news that RGGI proceeds, and thus the costs to generators with these contracts, are double what was anticipated, we hope policy makers will take a fresh look at the issue and find a way to level the playing field.’”
And another article from Virginia Mercury in February of 2020. “The measure from Sen. Lionell Spruill, D-Chesapeake, would order the state to give carbon allowances to any new electric generating plant that received an air permit and a certificate of public necessity and convenience before the state’s carbon regulation went into effect this summer. Only two facilities — the privately owned Chickahominy Power Station and C4GT facilities being developed within a mile of one another in Charles City County — appear to be affected by the measure, because though they were permitted prior to the rule, they have yet to be constructed.”
Regulators approved an increase to Dominion Energy customers of $2.39 earlier this year.
Virginia Scope is an independent news publication that is funded largely by donations and subscribers. As local newsrooms are losing writers each day, we are trying to fill the void to ensure that the public is informed and that leaders are held accountable for their actions. Please consider becoming a paid subscriber to our newsletter or making a donation through Paypal below so we can continue to work in Virginia.
