RGGI Allowance Prices Soar as Virginia Returns to Emissions Initiative

Virginia's return to the Regional Greenhouse Gas Initiative (RGGI) has led to a significant increase in RGGI allowance prices, more than doubling since the state last participated. The September 9 auction collected over $1 billion, generating $259 million for Virginia with a clearing price of $37.65 per allowance.

According to William Shobe, director emeritus of the Center for Economic & Policy Studies at the University of Virginia, the rising cost of allowances is expected due to Virginia leaving and rejoining RGGI, increasing electricity demand from data centers, and a heightened ambition for reducing emissions. However, he does not expect prices to continue rising unless an unforeseen shock occurs.

Utility companies like Dominion Energy are obligated to pay for emissions generated from natural gas power plants, which can then be passed on to customers. Dominion is asking the State Corporate Commission to raise its RGGI rider fee, proposing a monthly $13 charge on typical residential customer bills.