Proposed carbon market withdrawal spurs sharp criticism at public hearing

Courtesy of Virginia Mercury

As Gov. Glenn Youngkin’s administration moves forward with plans to withdraw Virginia from a regional carbon market, dozens of state residents spoke during a public hearing this week in support of Virginia’s continued participation.

Virginia began participating in the Regional Greenhouse Gas Initiative, a multistate carbon cap-and-invest program that requires electricity producers to purchase allowances for the carbon they emit, in 2021, following the passage of Democratic-backed legislation.

The proceeds from those purchases are returned to the states. In Virginia, over $500 million has been collected and earmarked for flood resiliency projects and energy efficiency upgrades for low-income homes.

“RGGI was passed through the democratic process,” said Nicole Keller, a resident of Virginia with a master’s degree in ecology. “I just don’t know how many ways the public will can be made clear.”

Laura Thomas, director of sustainability for the city of Richmond, pointed to $1.2 million in funding for flood resiliency the city has received to argue for Virginia’s continued participation.

“We must continue to support every tool at our disposal so that we can support these individuals on the frontlines of climate change,” Thomas said.

Nobody spoke in support of the withdrawal.

Youngkin has been seeking to pull Virginia out of RGGI since he was elected, calling the fee utility customers pay for Virginia’s participation a disguised tax. In Virginia, electric utilities are allowed to pass the costs of their carbon allowances onto its customers. RGGI data shows utilities are responsible for about three-quarters of Virginia’s carbon emissions that fall under the program, with unregulated merchant generators responsible for the remainder.

For Dominion, that meant an average monthly $2.39 fee added onto residential customers’ bills before the utility suspended the charge in anticipation of withdrawal from the program. Dominion, Virginia’s largest utility, has since sought to reinstate the fee in the amount of $4.64.

At a press conference organized by the League of Conservation Voters Thursday, College of William and Mary student Philip Ignatoff touted the benefits of the funding RGGI participation is generating and argued Virginia should lower energy bills through electricity rate reform.

“The benefits have started to materialize,” said Ignatoff. “This is the Virginia that I want to live in.”

Sen. Lynwood Lewis, D-6th, of Accomack, who carried the 2020 legislation allowing Virginia’s participation, said the state doesn’t “have those resources within the confines of our budget to realistically on a sustainable, recurring basis provide this level of funding for those issues. And in addition it wouldn’t do anything to reduce our carbon emissions.”

Members of Virginia Clinicians for Climate Action contended RGGI brings health benefits by reducing emissions.

“Put simply, taxpayers save $30 for every dollar that we put into RGGI and programs like it, and we’re healthier for it,” said Virginia Commonwealth University medical student Danny Walden, citing data from the U.S. Environmental Protection Agency. “If Virginia withdraws from RGGI, more Virginians will face the expensive burden of preventable disease.”

While no one at the public hearing spoke in favor of the withdrawal, numerous comments have been filed in support of Youngkin’s move during a public comment period slated to close March 31. To date, 500 comments both for and against the proposal have been filed.

David Stevenson, director of the Center for Energy & Environmental Policy with the Caesar Rodney Institute, a Delaware-based conservative think tank, pointed to data showing electricity generation in the state had decreased since 2020. He said that demonstrates Virginia is simply shifting emissions to out-of-state electricity producers.

“Virginia needs to leave RGGI behind,” wrote Stevenson.

Mike Town, executive director of the League of Conservation Voters, noted that most states that are served by PJM Interconnection, the regional grid Virginia is a member of, are already members of RGGI. PJM serves all or part of 13 states and Washington, D.C. Five of those states — Delaware, Maryland, New Jersey, Pennsylvania and Virginia — participate in RGGI.

“Even if we are importing some electricity, it is coming from a state that is following the same standards of Virginia,” Town said. “It’s really a red herring here.”

Several environmental groups on Thursday reiterated their stance that Youngkin cannot withdraw Virginia from RGGI through the regulatory process but must seek legislation.

Nate Benforado, a senior attorney with the Southern Environmental Law Center, declined to comment on any prospects of a legal challenge to the withdrawal, saying it depends on the final decision of the State Air Pollution Control Board, which will vote on the proposal.

“I still hold hope they listen to the people who have had their voices heard here today,” Benforado said.

Youngkin spokeswoman Macaulay Porter said despite no one speaking in favor of the withdrawal Thursday, it’s Senate Democrats who are refusing “to offer immediate relief to Virginians from the regressive tax, which does not do anything to incentivize the reduction of pollution.”

“Regardless, Virginians will see a lower energy bill in due time because we are withdrawing from RGGI through a regulatory process,” Porter said.