Virginia enviro groups file notice they will challenge Youngkin’s RGGI withdrawal

Environmental attorneys Monday filed notice that they intend to file a legal challenge against Republican Gov. Glenn Youngkin’s proposed regulation to withdraw Virginia from the regional carbon market known as the Regional Greenhouse Gas Initiative.

The Southern Environmental Law Center filed the notice of appeal in Richmond City Circuit Court on July 31 on behalf of Appalachian Voices, the Association of Energy Conservation Professionals, Faith Alliance for Climate Solutions and Virginia Interfaith Power and Light. The filings indicate the action will be taken against the State Air Pollution Control Board and the Department of Environmental Quality, as well as its director, Michael Rolband.

“Throughout this process, the administration has brushed aside serious questions concerning their lack of authority to take this action, and ignored the thousands of Virginians who have steadfastly opposed this misguided process,” said SELC Senior Attorney Nate Benforado. “We are disappointed it has come to this but look forward to presenting our arguments to the court.”

RGGI is an 11-state market that aims to incentivize electricity producers to generate fewer carbon emissions by requiring them to purchase allowances for every ton of carbon dioxide they release into the atmosphere. There is a limited number of allowances available that decreases each year. In Virginia, regulated electric utilities — which account for roughly three-quarters of power grid emissions — are allowed to pass on the costs of allowances to ratepayers.

Virginia joined RGGI in 2021 after legislation known as the Clean Energy and Community Flood Preparedness Act passed the Democratic-controlled General Assembly in 2020.

The appeal aims to challenge regulatory actions to withdraw Virginia from RGGI approved by the air board and DEQ. Youngkin has sought to remove Virginia from RGGI since his election, calling the allowance costs utilities are allowed to recover from customers a “hidden tax” that isn’t resulting in lower emissions. 

In June, the State Air Pollution Control Board voted to adopt the regulation, which was presented by Secretary of Natural and Historic Resources Travis Voyles and requires Virginia to leave the market at the end of the year. 

The notice of appeal is a legal formality that one party must file in court to notify the opposing party that a lawsuit is coming. The actual lawsuit, which will detail the environmental groups’ legal arguments in more detail, will be filed within 30 days in Fairfax County Circuit Court, according to a news release. 

Benforado has argued in front of the air board that the previous administration of Democratic Gov. Ralph Northam found that Virginia’s participation in RGGI requires the director of the DEQ to oversee the state’s participation in the program. But in a Joint Commission on Administrative Rules meeting, Voyles argued that the use of the word “authorize” in the relevant provision of state code leaves participation up to the discretion of the DEQ director. 

Republicans attempted to legislatively withdraw from RGGI this past session, but Senate Democrats shot the proposal down.

Youngkin completes review of new regs to pull Virginia out of carbon market by year’s end

It’s not clear if the lawsuit will result in a stay, or pause, of the regulatory proceedings to have Virginia leave RGGI by the end of year. The regulation was published in the Virginia Register Monday and is slated to go into effect Aug. 30 following a 30-day public comment period.

In a statement Monday, Voyles reiterated that RGGI participation is an “unnecessary tax.”

“The Office of the Attorney General confirmed the State Air Pollution Control Board has the legal authority to take action on the regulatory proposal using the full regulatory process — and the Board voted to do just that — furthering Virginians’ access to a reliable, affordable, clean, and growing supply of power,” Voyles said. “Virginians will see a lower energy bill in due time because we are withdrawing from RGGI through a regulatory process.”

In Virginia, RGGI costs previously equated to an average $2.39 monthly fee tacked on to Dominion residential customers’ bill. That fee was suspended last year in light of Youngkin’s withdrawal push; however, regulators recently allowed Dominion to recover the costs the company accrued during the suspension and will accrue during the remainder of the year, resulting in a $4.44 average monthly fee for residential customers that will go into effect this September.

The costs of RGGI compliance for Appalachian Power Company customers weren’t immediately known last month, because the utility includes those costs as part of a broader fee for environmental projects, but spokeswoman Teresa Hall said the utility has spent roughly $796,000 since 2021 for RGGI compliance costs to cover its natural gas-fueled Clinch River Plant.

In addition to Virginia utilities, third-party generators, which are responsible for roughly 30% of emissions from the state’s electric grid, must purchase allowances. 

Overall, revenues from the allowance purchases are returned to the states. In Virginia, over $500 million has been earmarked for flood resiliency and energy efficiency programs under rules outlined in state law.

Other environmental groups like the Sierra Club, Wetlands Watch, League of Conservation Voters and Natural Resources Defense Council have also argued against Virginia’s withdrawal from the program. 

“The legal case for this attempted repeal of the RGGI law is wobblier than an intoxicated bowling pin,” said Walton Shepherd, Virginia policy director for the NRDC, during the last air board meeting.