The Youngkin administration outlines a plan to withdraw Virginia from the carbon market by decree

Gov. Glenn Youngkin’s administration on Wednesday announced its latest plans to withdraw Virginia from a regional carbon market, a move critics say is illegal, would drain key federal funding programs and hurt the fight against climate change.

Acting Secretary of Natural and Historical Resources Travis Voyles said at a meeting of the state Air Pollution Control Board that the government plans to withdraw Virginia from the regional greenhouse gas initiative by changing the rules that govern the state’s participation in the market.

The regulations process typically takes 18 to 24 months from start to finish, after which the Air Board votes to repeal the ordinance.

The move is a lynchpin of the approach, outlined in an executive order Youngkin issued early in his tenure. This plan envisaged a two-pronged approach that would first repeal the regulation through an emergency provision and then permanently eliminate it through the normal regulatory process.

The full regulatory process “will allow for public comment … provides some certainty and good times for the contract term,” Voyles told Virginia Mercury after the meeting.

Virginia’s three-year contract with RGGI, Inc., the entity that coordinates the market, ends next year.

RGGI is a carbon reduction market involving 10 other mid-Atlantic and New England states that requires energy producers to purchase allowances for the carbon they emit and caps total carbon emissions.

The proceeds from the purchase of these certificates are then paid back to the state. In Virginia they are smuggled in Flood relief and low-income energy efficiency programs. Virginia has received approximately $379 million in RGGI proceeds to date.

According to state law, energy suppliers are allowed to pass on the costs of RGGI participation to the tariff payers. The Youngkin administration has stated that these increased costs, which average $2.39 per month for Dominion residential customers, are a burden on plan payers. Since then, Dominion No longer charge customers a specific fee for RGGI participation.

“RGGI is bad business for Virginia,” Voyles said, adding that the state cannot control the increased market cost of allowances.

But groups like the Southern Environmental Law Center continue to say the Youngkin administration cannot pull Virginia out of RGGI by changing regulations because the regulations were the result of legislation passed by the General Assembly in 2020.

“This is not consistent with the law,” SELC attorney Nate Benforado said.

From 2010 to 2020, before Virginia joined RGGI, power plant emissions didn’t decrease, Benforado said, referring to a March report on the program that the Department of Environmental Quality completed at Youngkin’s request. Emissions fell by over 30% with RGGI’s involvement, he added.

“Virginia needs RGGI,” Benforado said.

Board of Directors response

The reactions of the seven-member board differed between the four candidates nominated by Youngkin, a Republican, and the three nominated by former Gov. Ralph Northam, a Democrat.

Northam Appointed Hope Cupit, President and CEO of SERCAPan organization that helps low- to middle-income people in the US Southeast questioned whether it was constitutional to override the RGGI Act passed by the General Assembly by regulation.

Cupit previously said she received an email from a lawyer in the attorney general’s office stating that the Air Board does not have the authority to withdraw Virginia from RGGI. A Legal action to compel the release of this email under the state’s Freedom of Information Act is still awaiting an order from a Charlottesville Circuit Court judge.

She also noted the benefits of the recent RGGI-funded flood mitigation programs flooding in Buchanan County.

“Sometimes we feel forgotten,” said Cupit, who lives in Bedford.

Another Northam officer, retired pulmonologist Lornel Tompkins, said one year of data on Virginia’s participation in RGGI is insufficient to determine its effectiveness. She also questioned why the RGGI fee was being attacked, compared to other fees utility customers pay, saying the cost could be lower in the long run.

“Why don’t we go after the General Assembly to change the rules, rather than take something away from the state or the commonwealth that some factors will turn out to be positive?” Tompkins said.

Conversely, Youngkin appointed David Hudgins, executive director of the Virginia Energy Consumer Trust, an advocacy group that is skeptical about renewable energy, said he was concerned about the impact of RGGI on the state’s ability to target companies about rising energy costs. Virginia has previously been able to attract businesses from the Northeast by touting its lower electricity rates, he said.

“If we join (with) the Northeast, the Southern states will start sending their economic development teams here because our cost structure is changing and reflecting more of the Northeast than the people of the South,” Hudgins said.

Another Youngkin officer, retired attorney Jay Holloway, questioned whether RGGI actually caps carbon emissions because it allows producers to buy allowances in excess of the cap.

However, Michael Dowd, director of DEQ’s Air and Renewable Energy Division, clarified that allowances can only exceed the cap by a certain percentage.

“There is a cap in the general sense because it is a regional cap. There is a limited number of allowances for sale,” Dowd said.

environmental outcry

Several environmental groups rallied outside the venue at the Community College Workforce Alliance in Richmond, with rallies also taking place across the state in Roanoke, Harrisonburg, Woodbridge, Abingdon and Virginia Beach.

In Richmond, activists displayed caricatures of Youngkin and former Environmental Protection Agency chief Andrew Wheeler while chanting “RGGI is the law.”

Wheeler, who serves as Youngkin’s advisor, was appointed to his current position after Senate Democrats blocked his appointment as Secretary of Natural and Historical Resources. The Democrats’ move resulted in Republicans blocking 11 other Northam eras Eventsincluding two Air Board members.

Leah Jones, a coordinator for Virginia Interfaith Power & Light, a group focused on climate and environmental justice, called RGGI “an important stepping stone for our state to provide funds to those impacted by energy stress, severe flooding, and… while providing an incentive… Act on the climate and reduce Virginia’s carbon emissions.”

Jones and five other public speakers spoke out in support of RGGI during Wednesday’s meeting. Virginia Manufacturers Association executive director Brett Vassey disagreed, calling RGGI a tax and accusing it of being redundant given Virginia’s efforts to reduce emissions through the Virginia Clean Economy Act.

While the Virginia Clean Economy Act sets aggressive carbon reduction targets for the state’s regulated utilities, it does not apply to non-utility power generators that generate more than a quarter of the state’s carbon emissions subject to the RGGI.