by Steve Haner

Governor Glenn Youngkin (R) is seeking to get Virginia out of a regional carbon tax compact, yet inexplicably has offered supporters of the Regional Greenhouse Gas Initiative (RGGI) a path to protect it.

His proposal would remove the tax on monthly electric bills which has galvanized opposition and move the cost of the mandated carbon allowances into the base rates of Dominion Energy Virginia. If somebody told Youngkin that was a benefit to the taxpayers, he was misled. It still costs us money.

Who benefits from his move, especially if it becomes a long-term approach? The utility does, as it is still using ratepayer money, and also the various special interest spending programs now being supported with the RGGI taxes. The state collected $228 million last year and will likely collect $300 million in 2022.

The proposal is in the form of a budget amendment to House and Senate Bills 29, the so-called “caboose” bill that makes amendments to the budget now in force. As a language amendment to the caboose bill, if adopted, it technically would expire as of June 30, 2022.

The danger, and do not think for a moment I’m the first to see this, is that the amendment could migrate to House and Senate Bills 30, the new budget, and be in force from July 1, 2022, to June 30, 2024. By then, the RGGI tax costs would be established as a regular cost of doing business. It would reduce the excess profits that fund the customer rebates like those the State Corporation Commission just ordered and reduce the chance future excess profits might spark a rate cut.

Dominion will just love that. Guess who I suspect wrote and proffered that amendment, perhaps through a neutral intermediary? The Democrats will just love that, too, as a growing stream of cash will flow to their spending priorities. The tax could get high enough to actually justify an increase in future base rates. Let me repeat: RGGI could raise your base rates all by itself.

RGGI also functions to protect Dominion’s monopoly on generation sources in its service territory. The shrinking pool of allowances, with costs growing higher every auction, is a major block to new entrants in the energy business seeking to build fossil fuel facilities. The solution is to eliminate RGGI, not hide the cost.

There is yet another reason that this amendment must die quickly. It sets out in the budget bill much of the entire Code of Virginia dealing with utility regulation and the new clean energy mandates. It adds just one sentence to thousands of words of utility code. Once the underlying code section is in there, other amendments could quietly appear. The proper committee process is bypassed. We do not want that chapter of Title 56 set out in the budget in full.

As previously reported, Youngkin has laid out a path to repeal RGGI through the regulatory process. That will take time under the best of circumstances, and during that time the tax on electric bills remains and might even grow. Once RGGI is repealed, if the utilities still have costs they have not collected, the SCC will likely leave the tax in place a while longer.

This short-term amendment may appear to be a fix for all that, removing the tax immediately upon its passage, probably sometime in April. Maybe there is no risk that the idea of charging it to base rates will become permanent, but once something is baked into a budget bill it is hard to remove. The final conference report cannot be amended on the floor. A late governor’s amendment could be killed by the 21 Senate Democrats.

There is also a governor’s budget language amendment to eliminate RGGI, and in this case the proposed amendment is to both bills – the caboose bill and the full budget. The language does the job, but again must get approved by the Senate Finance Committee, controlled by Democrats 11-5. That is unlikely.

But the idea of burying the tax in base rates where the voters will no longer see it as a “rate adjustment clause” on their monthly bills? The Senate Democrats, with Dominion’s encouragement, will take that deal in a heartbeat. No one in either political camp is likely to let that one issue sink an otherwise-agreed-upon budget.

Strike the “RGGI in base rates” amendment. And I give the same advice the Godfather gave: pay attention to who brought you this deal.

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24 responses to “Do Not Move RGGI Tax Into Utility Base Rates”

  1. LarrytheG Avatar

    Sounds like whoever Youngkin got to help him with the legislative process might also be working for Dominion? ๐Ÿ˜‰

    1. energyNOW_Fan Avatar

      Yes let’s face we are owned by Dominion…TMac certainly admitted that when he was Gov, had to submit to what they demanded.

  2. Moderate Avatar

    Right, Steve! BIG problem.

  3. energyNOW_Fan Avatar

    RGGI is a blue state hand-holding club with fees to run the extra admin burden of having staff to count the CO2 emissions. CO2 emissions have come down drastically, but that was due to cheap natural gas prices. Pa. and Md. have excellent onshore wind resources in the mountains, maybe we should invade to take it over. Let’s ask Hogan for the west Maryland, don’t give it to WV, Larry.

    1. Dick Hall-Sizemore Avatar
      Dick Hall-Sizemore

      We could trade the Virginia Eastern Shore for west Maryland!

      1. energyNOW_Fan Avatar

        I was thinking same! Lets get the maps out.

  4. Nancy Naive Avatar
    Nancy Naive

    Nothing like a businessman to clean up the accounting.

    “Out of sight, out of mind,” as dear ol’ Mum used to say.

  5. LarrytheG Avatar

    When we talk about dollar impacts to consumers monthly electrical bills from RGGI , are we talking about all Virginia consumers of electricity or just Dominion? Will customers of the rural electric Co-Ops also be impacted?

  6. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    Thanks for this explanation. At first blush, I thought this might be a good idea. I did not think about the ramifications on Dominion’s excess profits.

    The danger is greater than you think. If adopted as amendment to the caboose bill, this change would have no expiration date.

    The explanation is a little complicated and has to do with the manner in which the budget bill is set up. Bills are constructed in major sections, called “clauses”. All bills have at least one clause, the enacting clause. Each bill starts off with the phrase: “Be it enacted by the General Assembly:” followed by “1. That….” This is the enacting clause. It summarizes what is being done in the bill, i.e. Code sections are being amended, added, repealed, or something else is being done. For most bills, the clause is sufficient. But, for some, there might be some special conditions, such as effective date that is different from July 1. Those provisions get put into additional clauses at the end. Those conditions are law, but they are not codified

    For the budget bill, all the stuff that is extraneous to the budget itself is tacked on to the end in clauses. Some of those clauses set out the varying expiration dates for the preceding clauses.

    The 2021 Appropriation Act had 26 enactment clauses, which must be a record. A lot of it was related to the pandemic, but there is a real danger that the Appropriation Act is becoming something like the omnibus bills in Congress. But, I digress.

    The caboose bill, as introduced, has 30 clauses. Clause 28 sets out June 30, 2022 as the expiration date for several specified clauses. One of those is clause 1, which is the actual biennial budget. Clause 30 states that several clauses have no expiration date. These are primarily clauses which amend the Code of Virginia, either amending or repealing existing Code sections or adding new Code sections.

    That is the setup.

    The Governor’s RGGI amendment would be a new, separate clause, setting out the entire applicable Code Section, with the relevant amendment.

    That amendment also would amend the last clause in the bill that lists those clauses with no expiration date to include the RGGI clause .

    The effect of this is to amend the Code just as a standalone bill would do, but using the Appropriation Act to do so.

    All these extraneous clauses get dropped out of the new biennial budget bill. They are not baked in. However, the clauses included in an Appropriation Act remain in effect until their expiration date, even if not set out in subsequent Appropriation Acts, unless subsequently repealed. And any Code amendments they enact are codified. That is why sometimes you will find a clause at the end of the Appropriation Act repealing clause XX of Chapter XXX of XXXX.

    1. LarrytheG Avatar

      Thank you. I’m not sure if I understand it all but more than I did, maybe.

      re: ” Those conditions are law, but they are not codified”

      what does that mean?

      Are there laws that are NOT in the code of Virginia?

      what’s the difference in practical terms?

      Do most/all elected legislators understand what you are describing, or do they rely on ‘interpreters”? ๐Ÿ˜‰

      1. Stephen Haner Avatar
        Stephen Haner

        I need to read it through again, but he may have taught me something… ๐Ÿ™‚

      2. Dick Hall-Sizemore Avatar
        Dick Hall-Sizemore

        Every bill enacted by the General Assembly has the force of law. Only those bills that have general application are included in the Code of Virginia, or codified. Bills with limited application or duration, such as charter bills and the budget bill, are included in the Acts of Assembly, but not in the Code of Virginia. Occasionally, there are other bills that have such limited applicability, they are not codified. Among staff, they are calle “Section 1” bills, because, rather than having a Code section, they have a Section 1. An example would be relief bills. See

        To make it more complicated, sometimes the General Assembly will enact a bill with only a Section 1, perhaps they are not sure where to put it in the Code. The Code Commission has the authority to assign the enacted legislation a section number for the Code of Virginia.

        In practical terms, only a few people may know about an uncodified enactment and they can be hard to find.

        1. Stephen Haner Avatar
          Stephen Haner

          Again, did not know that the Code Commission could move Section 1 bills into other titles. You’re on a roll showing me new stuff!

          1. Dick Hall-Sizemore Avatar
            Dick Hall-Sizemore

            Here is the section in the Code providing that authority.


            Here is the explanation provided on the Code Commission website:

            “Generally, Section 1 bills and other enactments that do not have a Code
            section number are not included in the Code. However, sometimes when it
            is determined that these provisions have general and permanent
            application, the Virginia Code Commission will assign a Code section
            number to these provisions so they are included in the Code.”

        2. Nancy Naive Avatar
          Nancy Naive

          So, it’s make the sausage and then hide it?

        3. LarrytheG Avatar

          so like a law that applies to ALL utilities goes into the code and a law that pertains only to Dominion goes into “Acts’?

          1. Dick Hall-Sizemore Avatar
            Dick Hall-Sizemore

            I am not sure if the General Assembly could, under the state constitution, enact legislation applicable only to Dominion, by name. If so, it would be a Section 1 bill and would probably require a three-fifths majority to pass, as is required of other special legislation.

            The more likely approach would be to draft a bill that, on its face, would have general applicability, but, because of the definitions in the bill, it would apply only to Dominion. Such a bill, if enacted, would be codified.

          2. LarrytheG Avatar

            seems like I’ve see that… stuff written so it applies to one entity and no others!

          3. Stephen Haner Avatar
            Stephen Haner

            Well, yeah, Dick, but that is why the bills always mention the Phase I and Phase II “utilities” as if they didn’t really mean APCo and Dominion…They really are special legislation hiding as general legislation.

          4. Dick Hall-Sizemore Avatar
            Dick Hall-Sizemore

            I was not aware of the Phase I and Phase II utilities language. Obviously, I don’t read utility bills. That is a perfect example of what I was talking about.

  7. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    One other observation. As far as the language is concerned, it makes little difference if the amendment is in HB 29 (the caboose) with an effective date sometime in April or early May or HB 30 (the new budget biennium bill) with an effective date of July 1. But whomever came up with this strategy was knowledgeable about the process (another indication that the smartest decision Youngkin has made or could make was bringing on Richard Cullen as counsel). Few people pay much attention to the caboose bill and it is easier to slip something through. That is, until you let the cat out of the bag.

    1. Stephen Haner Avatar
      Stephen Haner

      So you also see Cullen’s fingerprints? Interesting….Just a guess, of course, but I was there when I first saw it…Dominion a client for 30 years….was brother in law to the late Tom Ferrell. Not that those prove anything…

      1. Dick Hall-Sizemore Avatar
        Dick Hall-Sizemore

        Cullen’s fingerprints are also all over the executive orders. When I first read them, I was surprised at how carefully worded they were. Then I began to connect the dots.

  8. William O'Keefe Avatar
    William O’Keefe

    Given Youngkin’s background, he knew exactly what he was proposing. He promised to get us out of RGGI, so he should find a way to do it and rethink Virginia’s approach to climate change.

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