Tag: RGGI (Regional Greenhouse Gas Initiative)

Energy Affordability: An IQ Test For New Yorkers That They Will Very Likely Fail

Here in New York, our very-light-weight Governor Kathy Hochul is running for re-election. To her slight credit, she has noticed that New York is a high-cost state, not the least for cost of energy, and that New Yorkers are upset about that.

The Statue of Liberty in the foreground with the New York City skyline and wind turbines in the background.

From Manhattan Contrarian

By Francis Menton

Here in New York, our very-light-weight Governor Kathy Hochul is running for re-election. To her slight credit, she has noticed that New York is a high-cost state, not the least for cost of energy, and that New Yorkers are upset about that.

New Yorkers are right to be upset about the cost of energy. According to this chart from the federal EIA containing most recent data for July 2026, the average price of electricity to the ultimate consumer in New York for that month was 29.9¢/kWh, compared to a national average of 18.31¢/kWh; and New York’s cost had increased more than 14% from 26.22¢/kWh in July 2025, versus a 4.9% increase in the national average over last year’s 17.45¢/kWh. New Yorkers are also right to be upset because the premium they pay for electricity is mostly to entirely the consequence of intentional government policies that drive up the cost.

What’s crazy is that Governor Hochul has decided to make “energy affordability” a theme of her campaign. The reason that is crazy is that at the same time that Hochul claims she favors more “affordability,” she also brags about maintaining and expanding the very policies that have caused the excess costs. The person most responsible for New York’s high energy cost is Kathy Hochul. But hey, this “energy affordability” theme seems to have worked in somewhat comparable circumstances for Abigail Spanberger and Mikie Sherrill, running respectively in Virginia and New Jersey last year. If the Virginia and New Jersey voters fell for it, maybe the New York voters will too.

On September 15, Hochul launched her latest “energy affordability” initiative with a big press release and a press conference. This latest initiative seeks to mask a portion of New York’s higher costs by distributing checks and discounts to the populace. From Hochul’s press release:

“As Washington Republicans keep driving up the cost of energy, gas and groceries, I’ll never stop working to help New Yorkers keep more money in their pockets,” Governor Hochul said. “That’s why I expanded access to our Energy Affordability Program – a move that will save residents across the state up to $500 annually on their energy bills. Right now, 2.5 million eligible New Yorkers are leaving money on the table and I’m on a mission to help keep the lights on and costs down by launching an all-of-government push to get them enrolled in this money saving program.”

As is usual for New York politicians, the playbook only extends as far as trying to bribe the people with some portion of their own money. So this becomes an IQ test for New Yorkers: Can we calculate whether ratepayers come out ahead or behind under Hochul’s proposal?

Again from the EIA, the average New York household uses about 8000 kWh of electricity per year. There is a difference of 11.59¢/kWh between the average New York electricity rate and the average rate in the rest of the country. That means the average New York household pays more than $900 per year for electricity in excess of what it would pay if our rates were equal to the national average. Now our very generous Governor comes along offering a discount of “up to” $500, to 2.5 million households (out of about 8 million households). Let’s see, have we come out ahead or behind? (Which is larger, $900 for each of 8 million households, or “up to” $500 for each of 2.5 million households?)

And then there is the issue of how New York’s rates came to be so much higher than the rates in other states. It can’t be geography — as an example, bordering Pennsylvania’s average rate for July was 21.72¢/kWh, fully 27% lower than our average rate. If you look at the EIA’s chart of average electricity rates by state, there is a remarkable (although not perfect) correlation between Republican-led states on the one hand (low rates) and Democrat-led states on the other (high rates).

And then consider some of the major New York energy policies that drive up rates. First there is the Climate Leadership and Community Protection Act of 2019 (CLCPA). Provisions of this statute drive up consumer costs in multiple ways. First, the statute imposes a mandate that by 2030 70% of electricity must come from renewable sources. That provision makes it impossible to build new and more efficient natural gas power plants, or to re-power existing inefficient natural gas plants to use far less fuel to produce the same amount of electricity. Second, substantial amounts of new wind and solar generation have been built to try to comply with the 70% mandate, but since those only operate intermittently, all of the old natural gas plants must be retained, and we end up paying for two redundant generation systems instead of one. Third, the new wind and solar generators are also sited in remote locations, requiring substantial additional and expensive transmission, all of which gets paid for in electricity rates.

And then there’s the Regional Greenhouse Gas Initiative, or “RGGI.” RGGI is a compact among eleven Northeastern states to force greenhouse gas emitters (i.e., electric power plants) to purchase allowances for every ton of CO2 that they emit. The quantity of allowances shrinks every year, thus forcing the auction price to increase. The auction clearing price has gone from $2.53/ton in 2017 to $37.65/ton in the most recent auction this month. And the cost of the allowances ultimately gets added into the electricity rates. In short, this is a program whose main purpose is intentionally to drive up electricity rates.

The number of these “allowances” for FY 2026-27 is set at 25,356,513. At $37.65 each, that means that the State adds close to $1 billion per year to end-user electricity bills. Divide by the number of households, and it’s about $120/year each, which represents about 5% of the aggregate of consumer electric bills. And, unless the RGGI structure gets changed, this figure is almost certain to rise.

On August 5, two New York State agencies, the Department of Environmental Conservation and the Energy Research & Development Authority, finalized regulations relating to implementation of the RGGI compact in New York. In a press release of that date, the agencies claimed that New York had received $2 billion cumulatively from the auction receipts built into RGGI program to that time, but they said they were using the money to make “investments” that would return $12 billion, or six times as much:

The updated cap trajectory is designed to achieve affordable emissions reductions more quickly, while ensuring long-term availability of allowances under the program.  Net savings are expected to reach nearly $12 billion (PDF) over the lifetime of the investments, providing a nearly 6-to-1 benefit based on investment of about $2 billion to date.

Note that the $2 billion of receipts and $12 billion of “benefits” are only as to receipts to date. Receipts going forward are projected to increase dramatically, to a cumulative total of $4.7 billion by FY 28/29.

So where do they come up with this $12 billion of supposed “benefits,” not now, but supposedly over the lifetime of the programs funded by the $2 billion spent so far. There is no real information available on that. In a document called the “New York’s Regional Greenhouse Gas Initiative Operating Plan Amendment for 2026,” the agencies have provided a long list of entities and programs that either have or will be getting large cash handouts from the program. (To access that document, go to my colleague Roger Caiazza’s blog here, and follow the link for “Operating Plan Amendment” in the first line of that post.) There are dozens of recipients and programs listed, many getting funding of tens to hundreds of millions of dollars cumulatively over multi-year periods. Here are some examples of larger items listed: “Green Jobs Green New York (Fund)” — $517 million; “Clean Transportation” — $450 million; “UPA Efficiency and RE” — $389 million; “Retrofit Challenges” — $464 million; “Clean Energy Communities” — $144 million. And these are just a few examples of some of the larger allocations. So what exact entities are getting these vast sums, and what exactly are they going to do with the money to provide the claimed benefits? There are no details offered beyond the brief descriptions quoted.

In other words, these have the total appearance of being enormous slush funds passed out to friendly but unnamed NGOs. The idea that there will be $12 billion of benefits to the ratepayers from the $2 billion disbursed so far is pure speculation with no backup of any kind. Are there any actual “green jobs” emerging from the $500+ million handed out to the “green jobs fund”? Go ahead and try to find any of them. What is the “clean transportation” that we are supposedly getting for $450 million? If anyone knows they are not saying.

Do New Yorkers have sufficient IQ to figure out that they are getting scammed with this “energy affordability” mantra from Governor Hochul. I guess we will find out in the upcoming election. But let’s face it — New York voters are very likely to fail this test.

RGGI Auction Clearing Price Results

Today RGGI announced that the Auction 73 price did indeed exceed $35 closing $2.65 higher at $37.65.

The eleven participating states in the Regional Greenhouse Gas Initiative (RGGI), the nation’s first market-based regulatory effort to reduce greenhouse gas (GHG) pollution, today announced the results of their 73rd auction of carbon dioxide (CO2) allowances. 28,537,847 CO2 allowances were sold at the auction at a clearing price of $37.65.

Illustration depicting the RGGI (Regional Greenhouse Gas Initiative) auction process and its financial implications, highlighting increasing carbon allowance prices, electric bill breakdown, and contrasting promises versus realities of the program.

From Watts Up With That?

Roger Caiazza

Last week I gave an update on RGGI and posed the question whether the Auction 73 clearing price would exceed the Auction 72 price of $35.  Today RGGI announced that the Auction 73 price did indeed exceed $35 closing $2.65 higher at $37.65.  This post summarizes the impact of the auction.

The RGGI press release stated:

NEW YORK — The eleven participating states in the Regional Greenhouse Gas Initiative (RGGI), the nation’s first market-based regulatory effort to reduce greenhouse gas (GHG) pollution, today announced the results of their 73rd auction of carbon dioxide (CO2) allowances. 28,537,847 CO2 allowances were sold at the auction at a clearing price of $37.65. This includes an initial offering of 27,389,847 allowances and 1,148,000 CCR allowances. The allowance offering included a supply of 5,740,000 allowances from Virginia, which resumed RGGI participation on July 1, 2026. Bids for the CO2 allowances ranged from $2.69 to $190 per allowance. Additional details are available in the Market Monitor Report for Auction 73, which is appended.

A quick summary of what I have documented since July

In my last post I summarized four things that happened in quick succession this summer.  Two of them are relevant to this result.

In Hochul and RGGI Affordability I quantified the wholesale-market effect of RGGI allowance costs and showed that it contradicts Governor Hochul’s affordability messaging. New York’s electricity market pays every accepted generator the market-clearing price for a given interval. When an emitting generator sets that price, its RGGI allowance cost is embedded in the bid and gets paid to every resource dispatched in that interval — including non-emitting and imported resources that bear little or none of the underlying RGGI cost., I showed the RGGI allowance price has risen from $9.30 per ton in the first full auction of Hochul’s tenure to $35.00 at Auction 72 — a 276% increase.   At the Auction 73 cost of $37.65 the increase is 296%.  For a typical residential customer, the RGGI-attributable share of the bill was around 4.2% in 2024 but at $37.65 the share is 7.8%.

I also described the report by RGGI’s market monitor Potomac Economics.   On August 21, 2026, RGGI, Inc. released an unprecedented special report — the Report on the Supply and Demand for RGGI CO2 Allowances: Second Quarter 2026 — timed roughly eleven weeks after the record $35 auction. I covered this in RGGI’s Market Monitor Confirms the Scarcity I’ve Been Tracking.  I believe the intent of the release of the report was to calm the market.  However, the report confirms 2026’s CCR allowances are fully exhausted, confirms compliance entities and investors are increasingly hoarding rather than selling allowances as the compliance deadline approaches, confirms Virginia’s return adds less new supply than the demand it brings, and — most importantly — declines to say anything about whether the steep post-2027 cap trajectory is sustainable, because that question was “beyond the scope” of the report.  Given that the auction price still went up  this attempt to keep prices stable failed.

Costs are not hypothetical

Put together, these my work tells a consistent story. RGGI’s own cost-containment mechanism — the CCR, which releases additional allowances once prices cross a trigger — was exhausted as soon as the allowances were available in 2026, months before the compliance deadline. The regional cap is scheduled to tighten by more than 10% of the 2025 budget each year from 2027 through 2033, a pace never sustained historically. Virginia’s re-entry adds demand faster than supply. And New York adopted its conforming rule in August without grappling with any of this, relying on cost-impact modeling that predates the price spike and a ratepayer-benefit claim that ignores the wholesale market cost adder.

None of this is abstract for consumers. My estimates put the total New York consumer impact of RGGI — direct allowance costs plus the wholesale market cost adder — at $1.1 to $3.4 billion annually at a sustained $37.65 allowance price, more than double the direct-allowance-cost figure that state messaging emphasizes. Scaled across all eleven RGGI states, the same mechanism plausibly adds several billion dollars more. That is the real price of a program whose defenders describe rising auction revenue as a “big opportunity” for new spending rather than a cost signal ratepayers are already absorbing.

Auction 73 results

When I posed the question whether the costs would exceed $35 I noted that several signals pointed toward continued upward pressure on the clearing price rather than relief. Secondary-market allowances have been trading well above the $35 auction price throughout August, with Argus Media reporting 2026-vintage RGGI allowances in the high-$30s to around $40 per short ton in mid-to-late August (Argus Carbon), with December 2026 futures trading even higher. The market monitor’s own Q2 2026 report shows the share of the allowance surplus held by compliance entities — as opposed to investors with no obligation to sell — has fallen, and that investors holding 68% of the surplus have little incentive to release allowances for anything less than what the market has already shown it will pay. The 2026 CCR is gone. Virginia is a net new claim on the bank, not a source of relief. The larger Auction 73 offering did not absorb that pressure.  Instead, it simply confirmed how much latent demand exists because the price exceeded $35 despite the bigger offering.

Prior to the auction I said I would not be surprised it the price exceeded $35 a ton.  I noted that if it did it would  be real-time confirmation that the price trajectory regulators have not acknowledged is one more sign that the states’ own cost-containment tools — the mechanism they cite as evidence that consumer costs will be manageable — can no longer do the job they were designed to do.  Given these cost impacts it is past time to pause RGGI.

Roger Caiazza blogs on New York energy and environmental issues at Pragmatic Environmentalist of New York. Dealing with the RGGI regulatory and political landscapes is challenging enough that affected entities seldom see value in speaking out about fundamental issues associated with the program. He has been involved in the RGGI program process since its inception and has no such restrictions when writing about the details of the RGGI program. This represents his opinion and not the opinion of any of his previous employers or any other company with which he has been associated.

Green Hypocrisy. The Case of Baltimore’s Bresco Waste-to-Energy Incinerator

One definition of hypocrisy is pretending to have beliefs, values, or virtues that your actions do not match. In simple terms, it means saying one thing and doing another.

From Watts Up With That?

By Geoffrey Pohanka

One definition of hypocrisy is pretending to have beliefs, values, or virtues that your actions do not match. In simple terms, it means saying one thing and doing another.

On June 4th, 2024, Maryland Governor Wes Moore signed executive order 01.01.2024.19, Implementing Maryland’s Climate Pollution Reduction Plan. It stated Climate change poses an existential threat to the economy, natural resources, and public health for every Maryland resident. Maryland communities, particularly historically marginalized and overburdened communities, are disproportionately impacted by climate change. Maryland’s Climate Solutions Now Act of 2022 set ambitious climate goals for the State, including reducing greenhouse gas emissions by at least 60% by 2031 and obtaining net-zero greenhouse gas emissions by 2045. The Climate Pollution Reduction Plan estimates that the implementation of new climate policies will generate up to $1.2 billion in public health benefits, $2.5 billion increase in personal income for Marylanders, and a net gain of 27,400 jobs between now and 2031. 

Clearly an ambitious plan to take on climate change that some describe as the greatest single threat to human existence. But how serious are the green advocates in Annapolis in taking on one of the single largest CO2 emitters in the state, and one that can’t possibly be missed while driving the interstate through Baltimore.

I am talking about that large smokestack along I-95 in downtown Baltimore. This is the Bresco waste incinerator, the waste-to-energy plant that burns up to 2,250 tons of Baltimore’s municipal trash every day. The Bresco incinerator is the 10th largest incinerator in the country, the largest single polluter in the city, and accounts for 36% of its total air emissions. Bresco’s one smokestack emits more NOx into Baltimore’s air than ever other stationary industrial source in the city combined, some 75% of the total releases. It is also one of the largest NOx emitters in the state. The NOx emissions are so large that closing the facility would be equal to taking over half the cars off Baltimore’s roads.  Every year, the incinerator emits more sulfur dioxide into Baltimore’s air than all the cars and trucks on the road eight times over. It is also the largest single source of greenhouse gas emissions, releasing 690,033 tons of CO2 into the atmosphere. Lead emissions have totaled over 10,000 pounds since the plant began operations in 1985. The plant emits between 60 and 120 pounds of airborne mercury annually. This is over 30 times more mercury emissions per unit of energy produced than regional coal plants. 

Maryland is a member of RGGI, the regional greenhouse gas initiative, that caps and taxes CO2 emissions from fossil fuel power plants. According to a Baltimore Sun article, RGGI is equivalent to a 44% tax on fossil fuel power plant revenues and has, at least indirectly, caused most of the State’s coal power plants to become uneconomic to operate and voluntarily close. https://www.baltimoresun.com/2025/11/10/pavlak-green-policy-rggi/ Though the plant does generate usable steam for heating and cooling of 255 downtown businesses and electricity for up to 40,000 homes, the Bresco incinerator emits roughly double the amount of greenhouse gases per megawatt hour of energy produced than each of the largest coal power plants that had operated in Maryland. 

One important goal of Maryland’s Climate Pollution Reduction Plan is to protect historically marginalized and disproportionately impacted populations from pollution. Yet 114,000 people living just a few miles from the incinerator, are exposed to its pollution daily. In a clear case of environmental injustice, Baltimore’s most economically and socially vulnerable neighborhoods are more affected by air pollution from sources like Bresco than Baltimore’s wealthy neighborhoods. Bresco is located in South Baltimore among predominantly low-income and Black communities. The combination of emissions from Bresco and local vehicle traffic have proven to be a toxic mix. South Baltimore is unfortunately home to some of the most polluted air in Baltimore City. As a result of this, South Baltimore has the highest hospitalization rates for asthma. The communities closest to Bresco also suffer from lower life expectancies. This all means that the communities Bresco affects most directly are also the communities least able to manage the health damages that Bresco causes. A report determined that the Bresco incinerator was responsible for $55 million in health problems a year for people living near it. 

Considering the many environmental challenges this plant presents, one would logically be shocked to learn that not only is this plant not on the chopping block, it has been heavily subsidized by the State of Maryland. Since 2011 Maryland has classified waste-to-energy incineration as a Tier 1 renewable energy source under the Renewable Portfolio Standard, which requires electric utility companies to source a portion of their energy from renewable energy sources. Between 2012 and 2022, over $100 million in subsidies have been granted to the two in-state trash incinerators to maintain operations, despite emissions of more greenhouse gas per unit of energy produced than other power sources and including coal power.

Very recently the Maryland General Assembly passed legislation ending the “misclassification” of trash incineration as renewable energy and will end subsidizing companies that burn trash, instead redirecting these funds toward investments more green sources of energy generation such as solar energy. This does not mean that Bresco’s future will be in peril. When speaking with an important Maryland State Senator, I asked is it not better to put trash in a landfill instead of incinerating it? His response what that methane emissions from landfills was a greater menace to the environment the CO2 generated from burning waste. Perhaps he is unaware that modern landfills have the technology to capture methane before it enters the atmosphere and using it as a renewable resource. Studies have also shown that while methane has a powerful short-term impact on the climate, there is very little of it and it quickly dissipates once released into the atmosphere. 

The latest word is that the 41 year old Bresco incinerator will likely continue to operate through the mid-2030s, according to a Maryland Department of Public works report.

Geoffrey Pohanka, Chairman, Pohanka Automotive Group

Capitol Heights MD

This article was originally published by RealClearEnergy and made available via RealClearWire.

Virginia candidate would impose carbon taxes as governor

Virginia voters, taxpayers, and ratepayers should know that if Abigail Spanberger becomes their next governor, they will pay higher energy costs that will show up on their utility bills and everyday purchases.

From CFACT

By Kevin Mooney

Virginia voters, taxpayers, and ratepayers should know that if Abigail Spanberger becomes their next governor, they will pay higher energy costs that will show up on their utility bills and everyday purchases.

Spanberger made this clear during a podcast last year when she told a political science professor that as governor, she would have the state rejoin a climate change initiative built around “cap and trade” regulations and carbon taxes.

While Spanberger is committed to the carbon tax plan, Lt. Gov. Winsome Earle-Sears, her Republican opponent, supported Gov. Youngkin’s decision to withdraw. Given how costly RGGI (Regional Greenhouse Gas Initiative) was to Virginia residents and how costly it could become in the future, the candidates’ divergent positions could become a major campaign issue.

Glenn Youngkin, the incumbent Republican governor, withdrew Virginia from the Regional Greenhouse Gas Initiative (RGGI) in 2023 after describing the program as a “regressive tax on families and businesses.” A circuit court judge ruled last November that Youngkin’s actions were unlawful. But the state will remain outside of RGGI pending Youngkin’s appeal of that ruling. The outcome of this year’s gubernatorial election could also determine RGGI’s future in Virginia.

Higher Costs Without Environmental Benefits 

RGGI currently includes 11 New England and Mid-Atlantic states where government regulators impose an upper limit, or “cap,” on the amount of carbon dioxide emissions that power plants can emit. The initiative also creates “allowances” within interstate auctions that may be traded back and forth among companies subjected to the emission caps. The “cap and trade” plan adds a carbon tax to the price of fossil fuels that gets passed along to residents. Virginia joined RGGI in 2020 under Democratic Governor Ralph Northam, who signed off on legislation from the Democrat-controlled General Assembly. Virginia became the first Southern state to join the initiative. Since then, RGGI has not worked as advertised.

David Stevenson, director of the Center for Energy & Environment at the Caesar Rodney Institute in Delaware, took a deep dive into the impact RGGI had on Virginia in public comments he delivered on behalf of Youngkin’s decision to exit the initiative in March 2023.

Virginia electric generation fell 12% in 2022 compared to 2020. Power imports from the regional grid grew from 12% of demand to 30%, and that grid expects power shortages by 2030. In state CO2 emissions fell by 6.6 million metric tons from 2020 to 2022, but increased electricity imports increased emissions 10.3 million tons elsewhere for a net 3.7 million ton increase. Meanwhile the $523 million in RGGI revenue will be added to electric bills while in state generators lost $840 million in electric generation revenue. Over a decade the RGGI could cost Virginia $25 billion. Virginia needs to leave RGGI behind.

RGGI failed to reduce emissions in Virginia—and created a net increase—while raising energy costs for consumers. As Stevenson explains, any CO2 reductions that occurred in Virginia were more than offset by the higher costs of importing power from states not part of RGGI. Since Spanberger sounds determined to put Virginia back into the initiative, voters should demand she address the rising costs of those carbon auctions.

Stevenson pulled together figures from RGGI that showed allowance prices averaged $13.46/ton in 2022 and ended the year at $13, resulting in $128 million in costs added to electric bills. RGGI anticipates that these prices could rise to as much as $24/ton by 2030.

“It would be a priority for me to get Virginia into RGGI…” Spanberger said during the podcast. She claims the multi-state climate agreement would enable Virginia to “meet clean energy goals.”

But the facts and figures Stevenson presented indicate that the Spanberger-backed carbon tax scheme would raise energy costs in Virginia without producing any environmental benefits.

There’s another problem Stephen D. Haner, a senior fellow for environment and energy policy at the Thomas Jefferson Institute for Public Policy, has highlighted in his research. RGGI would put Virginia in a position where it would become more dependent on imports from other states. This would be particularly true, Haner warns, when wind and solar experience enter low production phases.

Do They Hate Reliable Energy?

Spanberger’s support for carbon taxes is very much in step with the anti-energy posture she assumed as a member of Congress. Some key examples include Spanberger’s vote against a bill that would have ended efforts to ban gas powered cars at the expense of consumers. Spanberger also voted down a bill that called for the Department of Energy to consider the cost-effectiveness of any new policy standards. Under the legislation, the department would also need to account for how mandated home appliance updates affect low-income families.

A decision to rejoin RGGI would come at a steep price for Virginia families since they are already contending with the fallout from the Virginia Clean Economy Act (VCEA), a.k.a. the Virginia Green New Deal. As Restoration News previously reported, Haner is expecting an almost 50% increase for Virginia ratepayers within the next two years based largely on green energy mandates of the VCEA, which went into effect in 2020.

If elected governor, Spanberger seems poised to deliver a one-two punch against Virginia ratepayers by imposing RGGI’s carbon taxes on top of the already spiraling costs of the VCEA. This opens up a weakness for Winsome Earle-Sears to hammer in the upcoming campaign.

This article originally appeared at Restoration News