Youngkin Axes Virginia Participation in RGGI Carbon Tax!

In 2021 as he was running for the office of Governor in Virginia, Glenn Youngkin pledged if he won, he would remove the state from the onerous carbon tax on coal- and gas-fired power plants called the Regional Greenhouse Gas Initiative (RGGI). True to his word, after winning, Younkin pledged to ax RGGI with an executive order (see VA’s New Republican Gov Pledges to Cancel RGGI Carbon Tax). But then Virginia’s Democrat Attorney General declared Younkin could not just use an executive order to remove the state from RGGI (see Va. Gov. Youngkin Can’t Use Exec Order to Block RGGI Carbon Tax). It’s taken over a year, but Youngkin is now on the verge of keeping his RGGI promise following a vote by the Virginia Air Pollution Control Board.

Glenn Youngkin, the RGGI Giant Kiler?

In a 4-3 vote on Wednesday, the Air Pollution Control Board voted to repeal its own regulations requiring utilities to buy CO2 allowances. All four Youngkin appointees voted in support of the measure, while all three appointees of former Democrat Gov. Ralph Northam voted against it.

Youngkin argues that the Virginia RGGI law (passed by the legislature) allows the state to join RGGI, but does not actually mandate that Virginia must participate. Since the state Air Pollution Control Board amended its own regulations requiring utilities to buy CO2 allowances, and since the Air Pollution Control Board is an executive branch agency, Youngkin instructed the board to undo the regulations requiring the allowances. The vote on Wednesday did that.

The measure now goes to Youngkin for his approval (which will happen), and then will be published in the Virginia Register and, 30 days after publication, it becomes effective.

The Democrats in the legislature are hopping mad and claim the law they passed requires the Air Board to enforce and require allowances. It’s shaping up to be a Constitutional crisis. Bring it on!

A summary of the news from The Virginia Mercury:

The Virginia State Air Pollution Control Board has sent a proposal to withdraw from the Regional Greenhouse Gas Initiative (RGGI) to Republican Governor Glenn Youngkin’s office for final approval. The RGGI is a regional carbon market that requires electricity producers to purchase allowances in quarterly auctions for every ton of carbon they emit. However, the Virginia administration has argued that the allowance costs passed on by electric utilities to consumers constitute a hidden tax.

All Youngkin appointees voted in support of the measure, while all three appointees of former Democratic Governor Ralph Northam voted against it.

The proceeds from the sales, totaling over half a billion dollars since Virginia began participating in auctions in 2021, are currently used for flood resiliency and energy efficiency efforts. Opponents argue that legislative change is needed to withdraw from the RGGI, and legal challenges are expected to follow the publication of the regulation in the Virginia Register.

The decision to withdraw is a controversial one, with Democratic members of the General Assembly opposing it and asking for proof that RGGI participation has not reduced emissions or improved quality in Virginia.

Reaction to the vote, reported by Norfolk’s WVEC-TV:

Youngkin praised the board’s decision in a statement Wednesday afternoon.

“Today’s common sense decision by the Air Board to repeal RGGI protects Virginians from the failed program that is not only a regressive tax on families and businesses across the Commonwealth, but also does nothing to reduce pollution,” Youngkin wrote in a news release.

Attorney Nate Benforado with the Southern Environmental Law Center (SELC), a group long opposed to Youngkin’s efforts on RGGI, said it was “a disappointing day.”

“With this action, the administration has decided it would rather circumvent the law than listen to the General Assembly and the clear voice of Virginians who know RGGI is working,” Benforado wrote.

The Virginia League of Conservation Voters (LCV) also slammed the vote as “illegal.”

“Today’s vote by Governor Youngkin’s rigged Air Board is a blatant end-run around the legislature and a handout to big polluters at the expense of Virginia communities that are now on their own to combat dangerous flooding,” Virginia LCV Executive Director Michael Town wrote in a news release.

Jay Ford, a Virginia advisor for the Chesapeake Bay Foundation, shared a statement saying that the RGGI repeal will “set back efforts to protect Virginia homes and businesses from flooding” and slow down work to restore rivers and streams.

“Participation in RGGI is more important than ever as climate change adds new challenges to Chesapeake Bay restoration,” Ford wrote. “About one-third of the nitrogen pollution in the Chesapeake Bay comes from air pollution that eventually falls to the ground or water.”

Gov. Youngkin’s full press release reacting to the Air Pollution Control Board vote to remove Virginia from RGGI:

Governor Glenn Youngkin issued the following statement on the State Air Pollution Control Board’s vote to repeal the Regional Greenhouse Gas Initiative (RGGI) regulation, as directed by the Governor’s Executive Order 9.

“Today’s commonsense decision by the Air Board to repeal RGGI protects Virginians from the failed program that is not only a regressive tax on families and businesses across the Commonwealth, but also does nothing to reduce pollution,” said Governor Youngkin.

Prior to RGGI, electricity generation increased while CO2 per MWh was almost cut in half in Virginia over the last ten years.

The General Assembly adopted legislation in 2020 which authorized but did not mandate the Air Board to adopt regulations which require Virginia’s participation in RGGI. As such, Governor Youngkin signed Executive Order 9 in January 2022 to direct the Department of Environmental Quality to examine the impact of RGGI and start the process of ending Virginia’s participation.

RGGI requires power-producers in Virginia to purchase carbon offsets from auctions managed by the interstate compact. The cost of those offsets are fully passed on to power customers who have zero choice because of the Commonwealth’s regulated utility model. Funds collected by the sale of these offsets are spent on Virginia government programs. Participation in RGGI is in effect a direct tax on all households and businesses, and there is a zero incentive for power producers to reduce carbon emissions.

“The Office of the Attorney General has confirmed the State Air Pollution Control Board has the legal authority to take action on the regulatory proposal using the full regulatory process – and today, the Board voted to do just that – furthering Virginians access to a reliable, affordable, clean and growing supply of power,” Governor Youngkin added.

This standard regulatory process for removal from RGGI will provide stability and an orderly withdrawal which will provide greater regulatory certainty and help prevent market fluctuations impacting consumers.

As the Governor outlined in his Energy Plan last year, impractical policy decisions and inadequate planning have left the Commonwealth facing substantial challenges on reliability and base load generation.

“While Virginians will see a lower energy bill in due time because we are withdrawing from RGGI and are one step closer with today’s vote, we need to ensure Virginia has a reliable, affordable, clean and growing supply of power by embracing an all-of-the-above energy plan that includes natural gas, nuclear, renewables and the exploration of emerging sources to satisfy the growing needs of Commonwealth residents and businesses. We’re working every day to reduce costs to hardworking Virginians–like the RGGI carbon tax–and make Virginia the best place to live, work and do business,” said Governor Youngkin.

For more great articles on natural gas development every single day, subscribe to Marcellus Drilling News using this convenient link.