Virginia Attorney General Takes Steps to Rejoin the Regional Greenhouse Gas Initiative

RICHMOND, Va.— Virginia’s newly elected Democratic Attorney General Jay Jones took action Thursday that creates a pathway for Virginia to rejoin the carbon market called the Regional Greenhouse Gas Initiative, or RGGI.

In November 2024, a judge in Floyd County Circuit Court ruled that the state must rejoin RGGI after its illegal withdrawal by then-Gov. Glenn Youngkin. But that ruling was stayed pending a March 2025 appeal filed by Jones’ predecessor, Republican Attorney General Jason Miyares.

On Thursday, Jones’ filed a joint motion with environmental groups that sued Youngkin in the Court of Appeals of Virginia requesting a continuance that could lead to a settlement or withdrawal of Miyares’ appeal. The move is one of several maneuvers Democrats now in control of Virginia’s government are taking to resume participation in the regional carbon market. 

“Today, the Commonwealth reopened the door for participation in RGGI, which we know lowers costs for the most vulnerable Virginians while holding industries accountable to transition to cleaner, more stable, and more affordable sources of energy,” said Jones in a statement Friday. “I am proud to have taken steps to correct course and set the Commonwealth back on a path toward long-term affordability and resilience.”

The move comes after Virginia’s new Democratic governor, Abigail Spanberger, said in her first State of the Commonwealth address on Monday that she wants to rejoin RGGI. Spanberger won the governor’s office by 15 points in November after campaigning on affordability. She and Jones replaced Youngkin and Miyares on Jan. 18.  

“Withdrawing from RGGI did not lower energy costs,” Spanberger said. “In fact, the opposite happened—it just took money out of Virginia’s pocket. It is time to fix that mistake.”

RGGI is currently a 10-state compact that requires electricity producers to purchase allowances for the carbon emissions they produce above RGGI-established limits. The amount of those allowances will decrease to 0 by 2050 to reduce greenhouse gas emissions and the release of pollutants. 

The revenues are returned to the states. In Virginia, they have amounted to about $830 million since the state’s Department of Environmental Quality joined in 2021. Virginia’s entrance came after Democrats in the state passed the Clean Energy and Community Flood Preparedness Act in 2020, requiring membership.

Under the law, 50 percent of the revenue from RGGI allowances paid by electricity producers, including utilities, from 2021 to 2023 was directed to energy efficiency programs, 45 percent went toward a flood preparedness fund and 5 percent covered administration costs.

In Virginia, utilities were allowed to recover the costs of their emissions allowances from ratepayers, which at first amounted to about $2.39 for a typical residential monthly bill in 2021, with that amount increasing to $4.44. 

Youngkin, who left the governor’s office last week after serving his one consecutive four-year term, as required by Virginia law, considered RGGI to be a “regressive tax” on electricity and moved to withdraw the state from the initiative upon taking office in 2022. The withdrawal took effect at the end of 2023. 

But environmental groups, represented by the Southern Environmental Law Center, filed suit in Floyd County Circuit Court after Virginia had withdrawn from RGGI. The lawsuit argued that Youngkin’s repeal of the regulation requiring participation in RGGI was unlawful, and that any change in Virginia’s participation with RGGI needed a General Assembly change to the Clean Energy and Community Flood Preparedness Act that created the regulation mandating participation.

“As such, the only body with the authority to repeal the RGGI regulation would be the General Assembly. This is because a statute, the RGGI Act, requires the RGGI regulation to exist,” Judge Randall Lowe wrote in his November 2024 opinion. “For the reasons set out in this opinion, the court finds that the attempted repeal of the RGGI Regulation is unlawful, and thereby null and void.”

Spanberger’s RGGI embrace, and Jones’ move Thursday in the Floyd County court, came as the Democratic legislature this week began work on its  next steps to rejoin RGGI. Del. Charniele Herring, D-Fairfax, had legislation approved by a subcommittee strengthening language in the clean energy and flood preparedness act requiring the state’s participation in RGGI. She had previously submitted budget language last week directing the Virginia Department of Environmental Quality to rejoin the Regional Greenhouse Gas Initiative.

Herring made repeated attempts over the past two years to rejoin RGGI despite the withdrawal by Youngkin. The Republican governor had also sought to use the revenues from RGGI for disaster response, as opposed to energy efficiency and flood preparedness, as the law requires.  

“Nothing worthwhile comes easy,” Herring said Wednesday in an interview with reporters after legislation advanced out of a subcommittee “It feels good that we’re going to continue to move. I’m very happy that it’s our new governor’s priority. I’m dedicated to this.”

Nate Benforado, an attorney with the Southern Environmental Law Center who represented the environmental groups that sued Youngkin, called Herring’s legislation approved in subcommittee a “belt with suspenders,” in that it changes language from “is hereby authorized to” join RGGI, to “shall” join.

“This is a critical program,” Benforado testified on Wednesday, pointing to pollution reduction and health benefits that accompany a gradual shift from fossil fuels to renewable energy. 

Benforado has noted that RGGI’s cap-and-invest requirements also apply to independent power producers in Virginia that generate electricity sold directly into a regional power market overseen by PJM, the nation’s largest energy grid operator. Those independent producers had made up about one-third of emissions in Virginia but had not been required to transition to clean energy under the Virginia Clean Energy Act, making RGGI the tool to encourage them to cut greenhouse gas emissions, he said. 

The Virginia Oil and Gas Association, the Virginia Chamber of Commerce and the Virginia Manufacturers Association all testified against Herring’s bill, saying they were concerned about companies needing to make up for RGGI expenses with rising costs for products. 

“Because our regulatory framework allows our power generators to pass along significantly all of their costs, RGGI fails to offer any meaningful incentive to reduce carbon emissions by our generators,” said Dylan Bishop, a lobbyist speaking on behalf of the Virginia Oil and Gas Association.

Republicans in Virginia, who have opposed Virginia’s decarbonization law, also oppose rejoining RGGI, supporting natural gas to satisfy their desire to keep electric costs low, despite renewables being considered the cheapest forms of energy to deploy.

“RGGI is a tax on energy bills. … We’re not in the business of redistributing wealth,” said Senate Republican Minority Leader Ryan McDougle, R-Henrico, after Spanberger’s state of the commonwealth address. “That’s what happens in Venezuela, not Virginia.”

Herring countered that revenues from RGGI lower costs for ratepayers to make their homes more energy efficient, and also provide funding to build new special needs housing that meet energy efficiency standards. While Southwest Virginia has mobile homes that predate 1970s energy efficiency requirements, a recent analysis shows that Richmond has about one in five households spending more than 10 percent of their income on energy bills.

In terms of flood control, RGGI revenues help localities plan for flood mitigation and build projects to increase resiliency, as climate change leads to increased sea level rise and intensified precipitation. A U.S. Chamber of Commerce analysis found that one dollar of investment in such mitigation efforts protects $33 of economic activity, Herring said. 

Herring said she remained committed to funding the current energy efficiency and flooding programs. But William Shobe, research professor emeritus of public policy at the University of Virginia and an architect of the RGGI program, suggested providing equal rebates to all customers from RGGI revenues. Since larger energy users pay more under RGGI, an equal rebate would benefit low-income households, since they use less and spend more of their income on energy. 

“I think it’s time to rethink that,” Shobe said.

Del. Jackie Glass, D-Norfolk, said she was interested in investigating ways to keep RGGI costs from being passed on to consumers. Sen. Addam Ebbin, D-Alexandria, agreed, saying “there very well may be” a way to make energy producers pick up more of the RGGI costs, something the attorney general’s office argued for under the Miyares leadership. 

“That would be fine with me,” Ebbin said.

Herring’s budget amendment would be part of a spending plan passed at the legislative session’s end in March, which advocates hope would allow enough time to participate in a quarterly RGGI allowance auction in June. At those auctions, allowances are put up for sale, and energy producers bid on a certain number of them to cover the emissions their power plants would generate.