RGGI Will Cost Virginia Billions—Just Like It Cost Pennsylvania
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RGGI Will Cost Virginia Billions—Just Like It Cost Pennsylvania

Virginians were promised affordability. Instead, they’re getting an energy agenda that risks making electricity more expensive and less reliable. Gov. Abigail Spanberger has consistently sided with the climate-policy wing of her party even when its proposals threaten higher energy costs for consumers. One such proposal is rejoining the Regional Greenhouse Gas Initiative (RGGI). In 2023, Virginia withdrew from RGGI, the regional cap-and-trade scheme that imposes a carbon tax in 11 states. As one of her first acts as governor, Spanberger signed legislation to rejoin RGGI, forcing the commonwealth back into the costly compact. But Pennsylvania provides an interesting case study for Virginians to consider. After six years of legal battles and lost investment, the Keystone State abandoned RGGI—and the commonwealth had a lot of good reasons to do so. Before jumping into the lessons learned, let’s dispense with the euphemisms. RGGI is far from a “market-based solution” to emissions. There’s nothing “voluntary” about a government edict that forces electricity producers to buy and sell “allowances.” Businesses don’t absorb those costs; they simply pass them along to ratepayers. RGGI is a carbon tax—plain and simple. Moreover, it does not address any real problems. From 2022 to 2023 (when it wasn’t in RGGI), Pennsylvania cut emissions by nearly 11%, the steepest year-over-year drop in decades. And despite the drought of new energy projects caused by the threat of RGGI, the Keystone State also managed to increase electricity generation in those years. In fact, Pennsylvania was one of the few states on its regional grid (Virginia included) to cut emissions and increase generation. Put simply, Pennsylvania was a success story, debunking the false choice between environmental stewardship and economic development—all without RGGI. Pennsylvania’s RGGI story was problematic from the start. In 2019, then-Gov. Tom Wolf issued an executive order that forced the commonwealth to join RGGI, bypassing the state legislature entirely. The decision was immediately challenged in court, leading to a 2023 court ruling that found the carbon tax unconstitutional. Wolf’s successor, Gov. Josh Shapiro, appealed the decision, prolonging this litigious battle. It wasn’t until 2025 that the governor jettisoned RGGI during state budget negotiations. But by then, the damage was real. Although the courts kept Pennsylvania out of RGGI, the legal limbo scared away would-be investment as electricity demand began to surge. Prior to RGGI, about three-fourths of proposed power projects came to fruition between 2013 and 2018, according to new analysis by the Commonwealth Foundation. That conversion rate plummeted to 9% during Pennsylvania’s six-year flirtation with RGGI. In fact, Pennsylvania didn’t build a single new natural-gas power plant during the RGGI years. Even worse, retirements of reliable power plants continued, resulting in a net loss of 484 megawatts—roughly what the entire city of Pittsburgh uses in a year. That matters for every state in the region, as Pennsylvania is the largest electricity exporter, and Virginia ranks among the highest electricity importers. These losses become starker when examining neighboring Ohio. Pennsylvania and Ohio share similar geography, natural resources, and market conditions. But there is one big difference: Ohio never joined RGGI.  And that little difference paid off for Ohio. During this RGGI sojourn, Pennsylvania added only 40 megawatts of new natural gas generation but lost out on about 3,800 megawatts of operable capacity—enough to power 1.9 million homes. Meanwhile, Ohio added thousands of megawatts during the same period. Ohio’s new generation proposal pipeline grew by 33% during this period, while Pennsylvania’s nosedived by 38%. What Pennsylvania lost in new energy investment, Ohio gained. Clearly, while Pennsylvania hemmed and hawed in court over RGGI, investors and producers set up shop in Ohio’s more stable regulatory environment. The final price tag of the RGGI years was staggering. During its six-year entanglement with RGGI, Pennsylvania forfeited an estimated $5 billion in new investment in its energy sector. Sadly, Pennsylvania’s flirtation with Green New Deal-style policies didn’t end with its withdrawal from RGGI. Instead, Shapiro has already doubled down on some of the worst aspects of RGGI and added even more unnecessary restrictions and mandates. The governor’s proposed Lightning Plan—an unsavory amalgamation of carbon taxes, renewable-energy mandates, and green-energy subsidies—will double household utility bills over the next decade. If Shapiro and Spanberger want to cut emissions and costs, they should lean into more reliable, affordable sources—namely, natural gas. Between 2005 and 2019, the United States removed more than 800 million metric tons of carbon dioxide—two-thirds of which the U.S. Energy Information Administration attributes to natural gas. Virginia’s future still relies heavily on energy. The state’s growth opportunities—everything from AI data centers to advanced manufacturing—are largely energy-intensive industries. Pew Research found that Virginia is a national leader in data center development, with nearly 400 centers built and more than 250 developments planned. Virginia’s economic well-being depends entirely on the availability of affordable, reliable energy—something which RGGI cannot promise. Also, Virginia taxpayers saved $937 million when the state pulled out of RGGI the first time. Lawmakers should learn their lesson. RGGI is a solution in search of a problem. Pennsylvania’s six-year RGGI ordeal serves as a cautionary tale that promises to scare away investment and further destabilize an already fragile grid. Virginia—and other states considering similarly damaging policies—would be wise to take heed of the Pennsylvania experience. We publish a variety of perspectives. Nothing written here is to be construed as representing the views of the Daily Signal.