Virginia regulators are voting on Gov. Youngkin’s plan to withdraw the state from the Climate Initiative

Virginia regulators are expected to hold a final vote on Wednesday on whether to move forward with Gov. Glenn Youngkin’s plan to withdraw from a federal carbon cap and trade program.

Virginia spent years under Democratic governments and strove to participate in the Regional Greenhouse Gas Initiative, which environmentalists say is a proven tool for reducing pollution and combating climate change. But that has reversed since Youngkin, a Republican who says the program acted like a regressive tax on electricity consumers, took office in January 2022.

A final decision to lift it by the state Air Pollution Control Agency – which is controlled by Youngkin commissioners and in an earlier vote supported the withdrawal 4-1 with two abstentions – would remove one of the last remaining hurdles to the governor’s proposal, although it does Ultimately, a legal challenge is expected.

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The Regional Greenhouse Gas Initiative (RGGI) is an initiative of 12 mid-Atlantic and Northeast countries to reduce carbon emissions from power plants. Participating countries require plants with a certain generation capacity to purchase allowances to emit carbon dioxide, a greenhouse gas that contributes to global warming, which scientists say is already accelerating sea level rise and exacerbating extreme weather conditions.

In Virginia, most of the proceeds from certificate sales — which have totaled nearly $590 million to date — are split between efforts to help places affected by recurring flooding and sea-level rise and a state-administered account to support energy efficiency programs for low-water income earners.

Youngkin, who acknowledges the threat of climate change and is committed to addressing sea level rise, says his concerns about RGGI (pronounced “Reggie”) center on the state’s electricity policy and the 2020 law that will make the state a full participant made program.

Virginia Governor Glenn Youngkin speaks at the state Capitol on February 25, 2023. State regulators are expected to hold a final vote on Wednesday on whether to move forward with Youngkin’s plan to withdraw from a federal climate program. (AP Photo/John C. Clark, file)

The law included wording that said the cost of certificates purchased under the initiative would count as environmental compliance costs, recoverable from tariff payers of monopoly utilities Dominion Energy Virginia and Appalachian Power.

“The introduction of the RGGI ‘carbon tax’ provides no incentive for behavioral change. Current law allows power producers like Dominion Energy to pass on all of their costs and bear essentially no costs for the carbon credits,” a 2022 administration report said.

Nate Benforado, a senior attorney at the Southern Environmental Law Center, dismissed that argument, noting that independent power producers, which are regulated differently and account for about 30% of Virginia’s power sector emissions, must also comply.

In public comment on the proposal, the SELC said Virginia’s emissions levels stagnated in the decade before the state joined RGGI, followed by a “marked shift” in reductions in the years thereafter.

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“Virginia’s total annual CO2 emissions from power plants decreased by approximately 5.5 million tons/year – from approximately 32.8 million tons in 2020 to approximately 27.3 million tons in 2022 – an overall decrease of 16.8% in just two years,” the group cited data from the Environmental Protection Agency.

Some RGGI critics wonder if this is due to participation in the program or other factors.

About 1,900 commentators opposed the governor’s proposal via an online portal in the most recent public comment period, compared with about 600 in favor.

Dominion, which serves around 2.7 million customers in Virginia, was among those in favor of lifting it. The utility wrote that RGGI’s involvement does not further the goal of carbon reduction, but “instead imposes unnecessary additional costs on Virginia customers, with no evidence of additional benefits.”

To date, Dominion has incurred approximately $490 million in compliance costs and has recovered approximately $267 million from customers, spokesman Aaron Ruby said.

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Appalachian Power spokeswoman Teresa Hamilton Hall said the company has incurred $742,000 in costs since 2021, most of which regulators say the company can recover from.

“Compliance with RGGI increases customer costs,” she said.

RGGI advocates have also argued that the way the Youngkin administration has attempted to exit the program — through administrative action after rejecting legislative attempts — is unlawful.

“We fully anticipate that a number of parties harmed by this action will suffer robust and ultimately successful legal challenges,” said Walton Shepherd, Virginia policy director and lead counsel for the Natural Resources Defense Council.

A final yes vote by the Air Board would put the proposal into a management review phase, after which it would be posted to the Virginia Register and then subject to legal challenge.