In July 2026, Virginia is set to rejoin the Regional Greenhouse Gas Initiative (RGGI), which sets a total carbon dioxide emissions cap for its electricity market. In a new insight, Director of Energy and Environmental Policy Shuting Pomerleau discusses the implications of Virginia’s decision to rejoin the RGGI.

Key points:

• Virginia’s decision to rejoin RGGI was made in a rushed manner, exacerbating a host of challenges and putting significant upward pressure on energy prices.
• Power plants in Virginia are already subject to strict carbon-free electricity mandates under the Virginia Clean Economy Act and layering RGGI on top will further increase costs for utilities; moreover, these duplicative restrictions complicate Virginia’s efforts to generate the dramatic ramp-up in electricity to power its artificial intelligence data center boom.
• An RGGI carbon price is likely the most efficient way for Virginia to reduce power-sector emissions, but its haphazard implementation threatens to force a spike in utility rates; Virginia’s re-adoption of RGGI, which produces revenue for the state, also highlights the challenges of enacting a federal power sector climate policy as states with climate policies such as RGGI may not be willing to forgo the associated revenue.

Read the analysis.