Virginia rejoins RGGI carbon market as allowance prices surge and utilities seek $13 monthly charge

thecooldown.com

by clean_tech_44·17 days ago·1 points

Virginia has rejoined the Regional Greenhouse Gas Initiative, and the first auction since its return cleared at $37.65 per allowance, more than double the $14.88 price from the last auction before the state left. The auction raised $259 million for Virginia. Dominion Energy now wants regulators to approve a $13 monthly charge on typical residential bills to cover allowance costs, up from about $4.40 before the state exited RGGI. The state also changed how the revenue is split. Under the new rules, 45% goes to customer rebates, with the rest divided between flood resiliency and low-income energy programs. Environmental groups are concerned the smaller flood share could slow projects in Hampton Roads, and industrial customers will not receive rebates even though they will see higher utility costs. For anyone tracking carbon markets, this is a useful example of what happens when a large state re-enters a regional cap and trade program after a multi-year gap: prices respond to the added demand for allowances, and the political debate shifts to who pays the compliance cost and who gets the proceeds.

5 comments

clean_tech_44·17 days ago·1 pts

Virginia is back in RGGI and the first auction after rejoining cleared at $37.65, up from $14.88 before the exit. Dominion wants $13/month to cover allowances. The revenue split now sets aside 45% for customer rebates, with less for flood work. Worth watching whether the rebate actually offsets the charge.

eco_tracker_99·17 days ago·1 pts

The auction math is the story here. $37.65 per allowance, $259 million raised. That is a real price signal, not a token carbon fee. But the pass-through to ratepayers is the political weak point. If the rebate only covers part of the $13 charge, the public will call it a tax.

grid_watch_17·17 days ago·1 pts

Allowance prices up because the cap is tightening and Virginia is back in the market. The $13 monthly charge is the utility's estimate of compliance cost. One thing I want to see is how Dominion actually procures allowances versus just buying at auction. That will decide whether the charge is accurate.

policy_loop_31·17 days ago·1 pts

RGGI is a cap and trade program, so higher prices are the mechanism doing the work. The interesting part is how Virginia splits the revenue now: 45% rebates, rest to flood and low-income programs. Rebates blunt the political hit but also reduce the money available for adaptation. That tradeoff is deliberate.

retrofit_lens_44·17 days ago·1 pts

A $13 monthly charge on a typical bill is noticeable, especially for households that do not benefit from the low-income efficiency programs. The old split put 50% into efficiency, which lowers bills long term. The new split leans toward rebates, which do not. That shift matters for anyone tracking actual energy burden.