by Steve Haner

Virginiaโs impending return to the Regional Greenhouse Gas Initiative (RGGI) has driven up the price for carbon credits in the multistate cap-and-trade systemโs secondary market.ย The futures price exceeded $41 per ton this morning, far above the roughly $25 per ton that utilities had to pay in the March 2026 auction.ย
It reflects the widespread expectation that Virginia electricity generators will be needing to buy far more allowances than Virginia will have available to sell, so they will be competing for allowances sold by the other ten states within the compact. High demand and short supply mean higher prices.ย ย
The next carbon allowance auction, and the first to include all the Virginia power plants as bidders, will be held in June, just weeks before the revised RGGI regulation takes effect in Virginia.ย As the General Assembly commanded, the final regulation was rushed through without any public input and has now been signed by Governor Abigail Spanberger (D).
The information page on the Virginia Regulatory Town Hall website includes a three-paragraph economic impact statement that says absolutely nothing about economics or ratepayer impact. Itโs a whitewash.ย The Governorโs Review Memo, dated April 24, is just one word: Approved.ย
Virginia will have 11.5 million carbon allowances to sell in the final six months (two auctions) of 2026.ย At the price set in the March auction, that will reap the state treasury about $288 million by the end of the calendar year.ย But a $40 per ton auction outcome would yield $460 million in six months and points to almost $1 billion in potential annual tax receipts in future years.
Some key points:
First, the regulation just adopted will be obsolete after this year.ย The other states, while Virginia was away, adopted many changes for the three-year โcontrol periodโ that begins in January 2027. Virginia will need a new regulation to reflect those.
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