Virginia is back: Rejoining RGGI is a huge win for climate, communities and energy affordability

Coauthored by Emily Steinhilber, Director, Climate Resilient Coasts and Watersheds, Virginia

With Governor Abigail Spanberger’s signature on a budget agreement that directs the Commonwealth to immediately rejoin the Regional Greenhouse Gas Initiative (RGGI), Virginia is back on track with the climate policy the state needs. This budget agreement — which legislators call the “caboose” budget — doesn’t just cut pollution, it supports communities as they adapt to increased flood risk and creates a dedicated pathway to increase energy affordability for those who need it most.

A huge dose of gratitude goes out to the General Assembly and the Governor for recognizing that a cleaner grid and affordable bills go hand-in-hand. By re-entering this proven, multi-state program, Virginia is securing a healthier, more resilient and more affordable future. 

A hard-fought victory

Virginia’s journey with RGGI has been eventful. The General Assembly originally passed a law in 2020 requiring participation, and the Commonwealth successfully participated from 2021 to 2023. Unfortunately, the Youngkin administration unlawfully withdrew the state from the program in 2024. While a court ruled his unilateral repeal “unlawful and without effect” in November 2024, an ongoing appeal kept Virginia on the sidelines.

With Governor Spanberger’s signature, that uncertainty is over. Virginia is back in the game.

How RGGI works for Virginians

RGGI is a practical, market-based solution to climate pollution. Power plant owners are required to purchase an allowance for every ton of carbon dioxide their plant emits. Over time, the supply of these allowances decreases, which steadily drives down emissions across participating states. Beyond delivering cleaner air, RGGI actively reduces utility reliance on dirtier, more expensive fossil fuels. This transition leads to steadier, more predictable energy bills, greater energy independence and enhanced grid security.

Where the money goes: Resilience and affordability

When power plants purchase carbon allowances, the revenue generated flows directly back into participating states.

Here is how RGGI revenue is put to work in Virginia:

• 50% for Low-Income Energy Efficiency: Half of all RGGI proceeds go directly toward reducing electricity bills for low-income households. RGGI is the only funding source for two pivotal Department of Housing and Community Development programs that make new and existing low-income residences more energy-efficient. On average, these upgrades save households $676 per year on their energy bills.
  
• 45% for the Community Flood Preparedness Fund (CFPF): Nearly half of the revenue empowers municipalities to implement community-scale flood resilience efforts. The CFPF prioritizes nature-based solutions and strictly sets aside at least 25% of its awards for low-income geographic areas. Since 2021, the fund has provided over $300 million in grants and loans supporting plans, studies, and projects across Virginia. Fund applications consistently outpace available resources, and without RGGI, there is simply no long-term mechanism to maintain this vital community lifeline.

Looking ahead

The Virginia Department of Environmental Quality has now been instructed to begin the necessary steps to rejoin RGGI immediately, a process that should conclude by the end of May. Rejoining RGGI is a victory for every Virginian who wants cleaner air, lower utility bills and neighborhoods that are protected from the impacts of climate change. Thank you, Governor Spanberger, Delegates and Senators, for prioritizing Virginians and climate over polluters.