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Dominion asks permission to withdraw proposed increase in carbon market costs

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Dominion Energy offices in Richmond

Dominion Energy offices in Richmond, Virginia.

Courtesy of Virginia Mercury

Dominion Energy is asking regulators for permission to withdraw an application to raise the costs to Virginia ratepayers for the state’s participation in a regional carbon market, citing “uncertainty” due to Gov.-elect Glenn Youngkin’s pledge to pull Virginia out of the program. 

By halting any future cost increases, “customers will benefit to the extent they will not bear the burden of increased near-term compliance costs that may not materialize,” Dominion wrote in a filing with the State Corporation Commission, the Virginia body that oversees utilities. 

Dominion has been seeking to update a bill rider that covers the costs of participation in the Regional Greenhouse Gas Initiative, an 11-state carbon market in which Virginia became active at the start of 2021. 

Under RGGI, any power plant that produces 25 or more megawatts of electricity must buy carbon allowances in quarterly auctions. In Virginia, the costs Dominion incurs for its carbon-emitting plants are passed onto customers. 

Beginning Jan. 1, Dominion customers began paying for the first year of RGGI participation, with the average residential customer’s monthly bill increasing by $2.39. 

In December, Dominion filed an annual update on RGGI costs with the State Corporation Commission. In its application, the company sought to increase the RGGI rider, with the average residential customer’s monthly bill rising by an additional $1.98, for a total bill impact of $4.37. 

Two days after the utility proposed the cost update, Youngkin announced he intends to withdraw Virginia from RGGI by executive action, calling it a “bad deal” for Virginians and Virginia businesses. 

Whether Youngkin will have the authority to do so as governor is disputed. 

In its motion to withdraw its updated cost application, Dominion proposed leaving the current rider in place to recover the costs of RGGI participation and said it would “be able to better estimate its future compliance costs once the timeline for the commonwealth’s RGGI participation is more certain.” 

“In the meantime, the company will continue to meet its compliance obligations under RGGI until the withdrawal is effective,” Dominion wrote. 

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