Tracking Regional Greenhouse Gas Initiative: When will electricity bills be impacted?

RICHMOND, Va. — Virginia is back in the Regional Greenhouse Gas Initiative — and for Dominion Energy customers, that means a new charge on electricity bills.

Dominion Energy is still seeking State Corporation Commission approval to recover costs associated with RGGI. The utility estimates it will need to buy 51 million carbon allowances from July 2026 through December 2028 at a projected cost of roughly $1.2 billion — money customers will have to pay back to Dominion.

Starting in March, Rider RGGI would add about $13 to the monthly bill of a typical resident using 1,000 kWh a month. Dominion has proposed spreading those costs out over two years instead, lowering the monthly impact to about $10 for 24 months.

At the same time, Virginia's return to RGGI means money will also be coming back to customers. Under Virginia law, 45% of the money the commonwealth receives from RGGI auctions must go toward lowering customer bills. The remaining 55% goes toward flood preparedness and energy efficiency programs.

Carrie Hearne with the Energy Commission of Virginia said that credit goes further than simply offsetting the new charge.

"That will kind of go above and beyond the need to make a ratepayer whole for that individual rider RGGI. So the rider RGGI credit for the credit will be more in excess than what the RGGI allocation would charge to the customer," Hearne said.

The state receives auction money quarterly, and Dominion is looking to pass the credits along on the same schedule. Ana Thomas with the Energy Commission explained why.

"Because the auction proceeds come from every auction. So even though the rider will be charged on a monthly basis, we get the proceeds on a quarterly basis," Thomas said.

That timing raised a question from Senator Mark Obenshain.

"I just question the fairness and we'd outta be looking at that," Obenshain said.

Patrick Carr with the State Corporation Commission said a monthly credit is also being considered.

"What I was envisioning was that while the Commonwealth gets the revenue from the auction quarterly, that that could get to customers as a prorated monthly credit to kinda smooth things out, but that remains to be seen," Carr said.

The amount available to customers also depends on how much the allowances sell for. Virginia participated in its first RGGI auction this month, with allowances selling for $37.65 — more than double the price when the state left the program in 2023.

UVA economist William Shobe said demand and the number of available allowances are helping drive that price higher.

"We have increasing scarcity of allowances because we have increased demand. We have Virginia joining. We have increased ambition to reduce emissions," Shobe said.

The auction generated $259 million for the state. The next auction is set for Dec. 2. The State Corporation Commission will hold a hearing on Dominion's Rider RGGI case Oct. 28.

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