Five environmental groups are suing to block Gov. Glenn Youngkin‘s effort to pull Virginia out of an interstate pact to cut the greenhouse gases that cause climate change.

The lawsuit, filed in Fairfax County Circuit Court, says the Air Pollution Control Board and the Virginia Department of Environmental Quality do not have the authority to pull Virginia out of the Regional Greenhouse Gas Initiative.

Dominion customers' bills to rise for RGGI costs Dominion Energy bills will rise to cover its costs for buying Regional Greenhouse Gas Initiative allowances to offset its excess carbon emissions, the SCC rules.

A state law enacted by the General Assembly in 2020 required Virginia join RGGI, a 12-state program under which power plants have to pay to buy offsetting allowances for every ton of carbon emissions.

Environmentalists say RGGI is a powerful tool to cut emissions.

Since joining RGGI, the five groups’ 138-page lawsuit says, carbon dioxide emissions from Virginia power plants in Virginia have decreased by nearly 17%, from about 32.8 million short tons in 2020 to about 27.3 million short tons in 2022.

Because the amount of allowances declines every year, the price of emitting greenhouse gas keeps rising, and that is meant to encourage power plants operators to slash that pollution.

Funds paid by Virginia power plants for their excess emissions, meanwhile, have paid for more than $328 million to help low- and moderate-income Virginians with ways to cut energy use and more than $295 million for flood control, a major issue in low-lying coastal and Chesapeake Bay communities.

“RGGI is a proven regional program that reduces carbon dioxide emissions from power plants,” according to the lawsuit, filed by the Southern Environmental Law Center, the Association of Energy Conservation Professionals, Virginia Interfaith Power & Light, Appalachian Voices and Faith Alliance for Climate Solutions.

A month after his election, Youngkin said he would pull Virginia out of RGGI, calling it a tax on ratepayers and a bad deal for customers and businesses.

Environmentalists and several Democratic legislators have argued ever since that because it was the General Assembly that required Virginia to join RGGI, only the legislature can pull the state out.

Youngkin is using a decision of the Air Pollution Control Board to repeal its regulation on RGGI’s operation in Virginia to end the state’s participation in RGGI when its current contract with the body expires at the end of 2023.

“The fact is that the General Assembly made a specific legislative decision to require Virginia to participate in RGGI, and only the General Assembly may revisit that choice,” the five groups’ lawsuit stated.

The lawsuit said the 2020 law requiring Virginia to join RGGI does not allow the board to repeal its regulation.

It also said the board and the state Department of Environmental Quality, along with DEQ Director Michael Rolband, exceeded their authority and violated the state constitution by basing the repeal on the grounds that it would reduce utility bills.

The board was able to do so only after Youngkin appointed new members to make a majority, which he was able to do because of two unexpected vacancies, according to the lawsuit.

The Virginia Clean Economy Act, also enacted in 2020, gives the State Corporation Commission authority to review how utilities pass on RGGI costs to customers.

“The Air Pollution Control Board is authorized only to take action to abate, control and prohibit air pollution. It is not authorized to regulate utility costs — and certainly not these specific costs, which the General Assembly expressly determined could be recovered in this way,” according to the lawsuit.

The SCC said last month that Dominion Energy could pass on more than $355 million of RGGI costs to customers, through a surcharge of 0.4425 cents per kilowatt hour on electricity used after Sept. 1. It translates to a bit more than $4.42 on a benchmark 1,000 kilowatt-hour monthly bill, which currently costs $125.

Youngkin has long said he wants to pull Virginia out because the way this state regulates utilities means they are free to pass on any costs they incur under RGGI to customers.

That means the incentive to cut emissions from payments for RGGI allowances does not work here, so that those payments become a kind of tax on Virginians, Youngkin argued.

“RGGI remains a regressive tax which does not do anything to incentivize the reduction of emissions,” Virginia Secretary of Natural and Historic Resources Travis Voyles said, in response to the lawsuit.

He said the Air Pollution Control Board does not believe Virginia is required to be in RGGI, adding that “the citizens of Virginia should not be subjected to this unnecessary tax.”

Voyles said the Office of the Attorney General has determined that the board had the authority to act as it did.

But the group’s lawsuit said staying in RGGI at least through 2030, as the law now requires, would fund energy-efficiency improvements for as many as 130,000 Virginia homes, saving each an average of $676 a year.

RGGI is a market-based effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont and Virginia.

Dominion, the state’s biggest utility, has put the total cost of RGGI allowances since 2021 through the end of this year at $640 million.

It collected $84 million through an RGGI-linked surcharge in effect from Jan. 1 to June 30, 2022, before it asked the SCC to suspend that surcharge after Youngkin announced he would pull Virginia out of the pact.

Dominion told the SCC it recovered an additional $183 million of RGGI-linked costs through its base rates. The balance that it is spending and will spend through the end of this year is what it is recovering through the new surcharge.

“Without our participation in RGGI, Virginians will be exposed to increased greenhouse gas emissions and more severe climate impacts with little or no support for their mitigation from the state,” said Faith Harris, executive director at Virginia Interfaith Power & Light.

“The weatherization and flood preparedness funds created due to our participation in RGGI were sound and practical solutions to stabilize Virginia’s economy in the face of rising energy costs, sea levels, temperatures and severe weather conditions. RGGI is working for Virginia, and Virginians know it,” she said.

“Given the intense warning signs we’ve received this summer, from record-setting heat to the horrifying wildfires affecting more and more Americans, it makes no sense to pull out,” said Andrea McGimsey, executive director of Faith Alliance for Climate Solutions.

Gov. Glenn Youngkin