By Steve Haner,

There is some irony in how Virginia will reenter the Regional Greenhouse Gas Initiative (RGGI) carbon tax scheme on Wednesday just as a long and deep heatwave begins.ย It is safe to predict that every RGGI-covered coal and natural gas generation plant in the state will be running full tilt until next weekend or longer to meet electricity demand. ย
The energy cost to the utilities and ultimately to consumers in multiple states will be greatly inflated by the mandate that the Virginia generation units must add the cost of RGGI to every megawatt hour they sell starting Wednesday.ย At $35 per ton of carbon dioxide emitted, the wholesale price of natural gas power may rise about $15-18 per megawatt hour, depending on the efficiency of the plant.ย
Advocates for wind, solar and battery power often tout its lower cost to produce.ย But within the PJM Interconnection regional transmission organization, the price you pay is not what the power costs.ย The price you pay is the price charged by the most expensive generation needed to meet the last portion of daily demand. This is why RGGI is a profit bonanza for solar power.ย
The $35 per ton of carbon emissions Virginiaโs natural gas plants must add to their prices starting Wednesday will also raise the price of every solar, wind, nuclear or hydropower megawatt generated.ย If a battery discharges, the price paid by PJM for that power will be higher because of RGGI.ย The generators (often independent companies) will collect the same amount per megawatt hour as the utility-owned coal or gas plant.
When Virginia load serving entities call on generation from out of state to meet their demand, those out of state suppliers will also get the inflated PJM marginal price. RGGI also means that West Virginia and Pennsylvania coal and gas plants will be selling more power into Virginia and selling it a higher price.
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