
by Steve Haner
The Regional Greenhouse Gas Initiative (RGGI) held its second 2026 carbon allowance auction last week and the bidding cleared at $35 per ton, the group announced Friday.ย That price was a 40 percent increase over the $25 per ton set for the carbon tax just three months earlier and was 78 percent higher than an allowance had cost a year earlier.ย
Should that price hold for the September and December 2026 auctions, Virginia will collect more than $400 million in tax revenue before the end of this year.ย Over the course of a full year, the state is likely to collect $800 million or more from electricity producers using natural gas, coal or oil for fuel.ย Of course, future auctions could (and likely will) set even higher prices, as the record shows. ย
A legislative panel, finally getting touchy about RGGIโs impact on customer bills, on Tuesday will discuss whether to give some of that money directly to customers.ย Dominion Energy Virginia is the largest user of the allowances and is expected to announce soon how much it will ask the State Corporation Commission to increase our bills to cover it (the betting is $7-8 per 1,000 kilowatt hours.)
The $35 per ton was lower than the allowance prices seen in recent weeks on the secondary market, where futures prices for an allowance to emit one ton of carbon dioxide passed $40 and had reached over $50 per ton for a 2026 โvintageโ allowance.ย The futures market has dropped back to levels closer to that June auction result but bears watching. ย The speculators havenโt lost their money yet.
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