In the News
The High Cost of Poor Energy Policies: Lora Current in Richmond Times-Dispatch
"Even some analysts supportive of climate goals are now acknowledging that RGGI’s current market structure may be creating unintended consequences, including higher wholesale power prices across neighboring states and increased dependence on imported electricity from nonparticipating regions."
Energy, Environment, and Agriculture Task Force Senior Manager Lora Current was recently published in the Richmond Times-Dispatch, examining the potential implications of Virginia’s anticipated return to the Regional Greenhouse Gas Initiative (RGGI) for energy affordability, economic growth, and the Commonwealth’s ability to meet rapidly rising electricity demand.
A recent surge in carbon allowance prices in the Regional Greenhouse Gas Initiative is offering a real-time warning about what happens when burdensome energy policies move faster than infrastructure, generation capacity and affordability realities can support.
According to recent reporting, Virginia’s anticipated reentry into RGGI is already sending shockwaves through regional electricity markets. Carbon allowance prices have nearly doubled in recent weeks as traders and utilities prepare for increased demand tied to Virginia’s participation in the cap-and-trade program. The result could mean billions in additional energy costs passed directly onto consumers across the Northeast and Mid-Atlantic.
For families and businesses already struggling with rising electricity bills, this is not a theoretical debate. It is a reminder that energy policy decisions carry real economic consequences.
The fifth edition of the ALEC Energy Affordability Report shows a clear relationship between burdensome energy mandates and higher electricity prices. The report compares electricity costs across all 50 states and finds that states with policies such as renewable portfolio standards, cap-and-trade programs like RGGI, and mandated net metering consistently face higher average electricity prices than states with more market-driven energy policies. In contrast, many of the states with the lowest electricity prices have fewer regulatory mandates and greater access to reliable, dispatchable generation resources.
Supporters of RGGI argue that higher carbon prices are an intentional feature of the program, designed to discourage fossil fuel generation and encourage investment in cleaner energy sources. However, the challenges policymakers continue to overlook are timing and scale. Electricity demand is rising rapidly, driven in large part by the explosive growth of AI and data centers, while dispatchable generation and transmission infrastructure are not expanding quickly enough to keep pace.
Virginia illustrates this tension clearly. The commonwealth is home to the world’s largest concentration of data centers, driving unprecedented growth in electricity demand. At the same time, policymakers are pursuing aggressive carbon reduction policies that increase compliance costs for existing power generation before replacement infrastructure is fully available.
When affordability and reliability are treated as secondary concerns, consumers inevitably pay the price.
The consequences extend beyond monthly utility bills. Rising energy costs impact manufacturing competitiveness, business investment decisions and household budgets. Higher industrial electricity prices can also drive investment and jobs to regions with lower regulatory costs and more stable energy markets.
Even some analysts supportive of climate goals are now acknowledging that RGGI’s current market structure may be creating unintended consequences, including higher wholesale power prices across neighboring states and increased dependence on imported electricity from nonparticipating regions.
States can pursue environmental progress while also protecting affordability and reliability, but doing so requires policymakers to fully evaluate cumulative regulatory impacts, prioritize grid resilience, support diverse and dispatchable energy resources, and ensure that infrastructure development keeps pace with demand growth.
The developments unfolding in the Northeast should serve as a cautionary example for policymakers nationwide.