by Steve Haner
The Regional Greenhouse Gas Initiative (RGGI) held its first carbon allowance auction of 2026 Wednesday and the price came in at just under $25 per ton of emissions, 26% higher than a year ago. There should be no doubt now about predictions that imposing this carbon tax on Virginia electricity plants will cost them $550 million or more per year once Virginia is again a full member. ย
What the tax costs the electricity producers will then be paid by their customers, one way or another. In returning Virginia to this interstate trading compact the General Assembly imposed no barrier on the utilities or independent producers simply passing the cost on to energy buyers. Raising the price of hydrocarbon-fueled power is the whole point of RGGI.
The price of an allowance has basically doubled since Virginia last participated in this exercise, from 2021 through 2023. If Dominion Energy Virginia goes back to collecting the tax with a direct charge on its monthly bills, what was just over $4 per month three years ago for a 1,000 kilowatt hour user will likely be $7 per month or more in 2027.
The $24.99 auction price was slightly lower than the $26.73 bidders paid in the December 2025 auction. March’s price was held in check by RGGI releasing 7.8 million allowances it had held back in a cost containment reserve (CCR). It did the same a year ago, releasing more than 8 million allowances from the CCR in the March auction, draining its reserve for that year.
The acceleration in the allowance price, really a tax per ton of emissions, is bound to continue. It happens by design. It was $7.60 per ton during Virginiaโs first auction just five years ago and was $24.99 per ton Wednesday. If that trend continues (almost 230% growth in five years), in March 2031 the auction price will be approaching $60 per ton of CO2.ย











