by Steve Haner
Virginia’s return to the Regional Greenhouse Gas Initiative (RGGI) will produce such an explosion of new tax revenue and will cause such major increases in consumer electricity costs, a political feeding frenzy is beginning to erupt over the money.
A legislative study panel heavily controlled by Democrats who voted for Virginia’s return to RGGI decided earlier this week to consider finding a way to rebate the money back to energy consumers. This came after Dominion Energy Virginia, the company most vulnerable to RGGI, asked to raise electricity prices by more than 7 percent to recover RGGI expenses.
The same Democrats and their leader Governor Abigail Spanberger assured voters that returning to RGGI would not increase electricity costs and would instead lower them. The only way to meet that false promise now is to give all the money back.
To really make a dent in the rising electricity costs, the legislature must rebate to homeowners more money than the RGGI taxes will add to residential bills. People will only come out even or ahead if the state also takes the RGGI revenues from commercial and industrial users and transfers those dollars to residential users, too.
That is because the money the utilities pay for carbon allowances, the carbon tax, is only one way that being in RGGI raises Virginia electric bills. Being in RGGI also drives down the operating tempo of Virginia generation using coal or natural gas, causing the state to import more power from other states in the PJM Interconnection market which are not in RGGI. Ratepayers are covering the capital costs of plants which are idle more often than without RGGI.
