A yearslong saga over Virginia’s future in a regional carbon market likely won’t be over anytime soon.
A recent court decision found it was unlawful for Gov. Glenn Youngkin’s administration to pull the Commonwealth out of the Regional Greenhouse Gas Initiative, known as RGGI.
But moving forward with rejoining is on hold while the state plans to appeal.
“Basically, we have an order saying that what they did is illegal, but until all of this is resolved, there’s not going to be any practical effects of it,” said Grayson Holmes, senior attorney with the Southern Environmental Law Center.
State lawmakers under Gov. Ralph Northam voted in 2020 to join RGGI, which aims to cut climate pollution by requiring power plants to buy allowances for their carbon dioxide emissions.
Those credits are then sold at quarterly auctions, which generate revenue for participating states. Virginia earned more than $800 million while it participated in RGGI.
That money has been used to fund energy efficiency and flood preparedness projects around the state, including many in Hampton Roads.
Youngkin vowed to remove Virginia from RGGI when he took office, citing higher energy costs for ratepayers. Dominion Energy added a monthly fee of about $4 to help recover the cost of buying allowances.
The administration succeeded in 2023 when the state Air Pollution Control Board approved a repeal of the RGGI regulation. Virginia last took part in a RGGI auction that December.
Environmental groups, led by the Southern Environmental Law Center, quickly challenged the move in court. SELC represents several organizations that work on energy efficiency in Virginia, including contracting with a program funded solely by RGGI.
Their lawsuit argued that because the RGGI law was passed by state lawmakers, only they could repeal it. In November, Circuit Court Judge C. Randall Lowe agreed.
“The only body with the authority to repeal the RGGI regulation would be the General Assembly,” Lowe wrote. “The court finds that the attempted repeal … is unlawful, and thereby null and void.”
But that doesn’t mean the regulation automatically goes back into effect, said Holmes, the SELC attorney.
The court recently entered an order directing the state to publish a notice in the Virginia Register of Regulations that the RGGI repeal is vacated.
Last week, however, Virginia Assistant Attorney General R. Cooper Vaughan filed a motion to stay the judgment, saying sending the matter to the Virginia Department of Environmental Quality as the court case proceeds would “irreparably harm the Commonwealth and create regulatory chaos.”
The Attorney General’s office declined to comment to WHRO, citing the pending litigation.
Holmes said aside from the court appeal, it’s also unclear how exactly Virginia would go about rejoining RGGI.
In court documents, the state said that would require negotiating new contracts, because the previous one has expired.
Undoing the 2023 repeal without RGGI membership in place “would lead to extreme uncertainty as to how regulated entities are to comply,” Vaughan wrote.
The SELC now has until Feb. 7 to respond to the state’s motion to stay the court order.
“We're going to be litigating that for the next probably month and a half or so,” Holmes said. “And then we'll see what happens.”
In the meantime, Sen. Mamie Locke (D-Hampton) introduced a budget amendment at the General Assembly that would require the state to rejoin RGGI. A similar attempt failed during last year’s session.
