Virginia is set to reenter the Regional Greenhouse Gas Initiative (RGGI) on July 1, saddling the Commonwealth’s electricity sector with a costly cap-and-trade program just as reliable, affordable power is needed most.

RGGI is a multi-state compact in which participating states impose carbon dioxide emissions caps on power plants. Utilities and generators must purchase emissions allowances through quarterly auctions to continue providing power. Each year the emissions allowances decrease, making purchasing hydrocarbons more expensive and forcing utilities to purchase more energy from wind and solar sources.

Dominion Energy previously imposed monthly RGGI-related charges on Virginia customers averaging roughly $4 to $5 per month for residential households, and those costs will be even higher now.

In practice, RGGI operates as an energy tax that artificially raises electricity costs while forcing an energy transition that decreases grid reliability with no clear environmental benefits. 

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Virginia has not participated in RGGI since 2023, when then-Gov. Glenn Youngkin withdrew the state, but lawmakers recently passed legislation reversing that decision. The Virginia Department of Environmental Quality finalized regulations advancing Virginia’s return to RGGI on May 21, with the state planning to formally resume participation on July 1. Virginia cannot afford to reenter this initiative without risking its economic success. 

Northern Virginia has become the data center capital of the world, hosting the largest concentration of data centers on the planet and processing an estimated 70% of the world’s daily internet traffic. Virginia’s data center boom has generated nearly $40 billion in economic output and contributed to lower residential property tax rates in data center hubs.

U.S. electricity demand tied to data center growth is expected to reach as high as 12% by 2028 as artificial intelligence and cloud computing expand. Sustaining Virginia’s data center boom and its economic benefits requires reliable power. RGGI undermines any effort to maintain a reliable grid.

PJM Interconnection, Virginia’s regional grid operator, and North American Electric Reliability Corporation (NERC) have issued urgent warnings about grid reliability risks stemming from the retirement of dispatchable generation sources such as coal and natural gas without reliable replacement capacity.

Yet despite these warnings, Virginia policymakers are preparing to adopt a carbon-pricing system that forces a transition to less reliable energy sources.

Renewable advocates frequently claim that solar, wind, and battery storage can seamlessly meet future electricity demand. But intermittent generation remains dependent on weather conditions and time of day. Maintaining reliability under renewable-heavy systems also requires enormous investments in transmission infrastructure and backup generation. Wind and solar cannot independently provide the around-the-clock dispatchable power needed to sustain hospitals, military installations, manufacturing, and data center operations. 

Virginia can learn from states like Pennsylvania that left RGGI over affordability and reliability concerns. Former Gov. Tom Wolf attempted to force Pennsylvania into RGGI through executive action, but the effort faced intense public opposition over concerns about electricity affordability, industrial competitiveness, and grid reliability. Pennsylvania courts ultimately blocked the state’s participation amid legal challenges and growing public concern that the program would increase utility costs and undermine the grid in one of the nation’s largest energy-producing states.

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Electricity prices across many RGGI-participating states consistently rank among the highest in the nation. States such as New York, Massachusetts, Connecticut, and Rhode Island have long combined aggressive climate mandates with elevated electricity costs that reduce affordability for families and businesses. 

Rather than rejoining a regional carbon-pricing compact that intentionally raises the cost of reliable generation, the Commonwealth should focus on policies that expand energy abundance. That means maintaining a level playing field for power sources and reducing regulatory burdens preventing new generation. 

Virginia lawmakers may have taken the legislative and regulatory steps necessary to return the Commonwealth to RGGI, but that does not make the decision wise. Reentering the compact will raise electricity costs and place additional strain on grid reliability when Virginia needs more affordable and dependable energy generation. 

Virginia should reject RGGI before higher costs and a weaker grid become the new normal for hardworking families and businesses.