By Steve Haner
A circuit court judge in Floyd County may soon order Virginia to rejoin the Regional Greenhouse Gas Initiative and to reimpose the related carbon tax on Virginia’s electricity consumers.
Judge Kenneth “Mike” Fleenor Jr. ruled earlier this month that a suit seeking reinstatement of RGGI could continue and held a hearing on February 5 on the question of “immediate relief.” The plaintiff, a group of energy efficiency and insulation contractors using the RGGI tax dollars for their programs, has claimed it will suffer immediate and irreparable harm unless Virginia returns to collecting a carbon tax on coal and natural gas used by utilities.
The main impact of RGGI membership is on Virginia’s largest electricity provider, Dominion Energy Virginia, which simply passed the carbon tax directly on to customers on their monthly bills. It stopped buying carbon allowances last year, but the bills had accumulated, so it is still charging customers.
Virginia’s Solicitor General Andrew Ferguson pointed out that the state bank account holding proceeds from the carbon tax collected in 2021, 2022 and 2023 still held $350 million and was only being expended at $30 million or so per month. There should be enough to keep the plaintiff’s program going through 2024 as the case proceeds, he told the judge, according to a transcript of the hearing.
The plaintiff is the Association of Energy Conservation Professionals, with members who have been operating programs to insulate and weatherize properties using donated and government funds for almost 50 years. It claims the RGGI dollars are the sole support for a particular program, but there are other funding sources for this work, including other money collected from utility customers.
Can an entity that benefits from a government spending program assert a right to maintain that spending program? Once a tax funding a particular program is created, can it ever be repealed? The contractors’ reliance on this stream of tax revenue has been recognized by two circuit courts now as sufficient standing to sue and demand reinstitution of the tax. Continue reading