Can a Virginia Governor, by executive order alone, end the state's participation in the Regional Greenhouse Gas Initiative and the requirement that electric utilities hold CO2 allowances?

Subject

The Governor may not, solely through an executive order or other executive action, repeal or eliminate the regulatory requirement that electric utilities and other electricity producers hold carbon dioxide allowances that equal the amount of their carbon dioxide emissions.

Plain-English summary

Virginia legislators asked whether the Governor could use an executive order or other executive action to eliminate the carbon dioxide allowance requirement for electric utilities and other electricity producers. The Attorney General answered no.

The opinion says the General Assembly passed the Clean Energy and Community Flood Preparedness Act in 2020. It directed the Department of Environmental Quality (DEQ) to amend its carbon dioxide budget regulations. Under those regulations, owners and operators of covered sources must hold allowances at least equal to their carbon dioxide emissions from burning fossil fuel. The opinion says producers can obtain allowances through a Regional Greenhouse Gas Initiative auction.

The AG relied on two provisions of Virginia's Constitution. Article V, § 7 requires the Governor to "take care that the laws be faithfully executed." Article I, § 7 says suspending laws or their execution without the representatives' consent "ought not to be exercised." The opinion quotes an earlier AG opinion: "the Governor may not unilaterally direct, by any means, that a validly adopted regulation that has the force of law be suspended or ignored."

The conclusion applies to the method asked about: the Governor may not, solely through an executive order or other executive action, repeal or eliminate the allowance requirement. The opinion does not decide a particular later legislative or regulatory proposal.

What this means for you

Electricity producers covered by the regulation: The AG's conclusion is that an executive order alone cannot remove the requirement to hold allowances equal to emissions. The opinion describes buying allowances through the RGGI auction as one way to comply.

State officials: The opinion ties its answer to the Governor's duty to execute statutes and valid regulations. It does not analyze a specific alternative regulatory process.

Common questions

Can the Governor cancel the allowance requirement by executive order?

The AG says no. The conclusion also covers other executive action taken alone to repeal or eliminate the requirement.

What does the opinion say a covered producer must hold?

Allowances in an amount at least equal to carbon dioxide emissions produced by burning fossil fuel during the applicable period.

Does the opinion say what would happen in court if the Governor issued such an order?

No. It states the AG's legal conclusion about executive authority, without deciding a lawsuit or remedy.

Does it rule on every possible change to the program?

No. The question and conclusion concern repeal or elimination by executive order or other executive action alone.

Background and statutory framework

The Act amended Va. Code § 10.1-1330. The opinion quotes subsection (B) as authorizing DEQ's director to manage an auction program for allowances in a market-based trading program consistent with RGGI and the Act. It then describes DEQ's allowance regulation and applies the Virginia Constitution's take-care and anti-suspension provisions to the Governor's proposed unilateral action.

Citations

• Va. Code § 2.2-505
• Va. Code § 10.1-1330
• Va. Const. art. I, § 7
• Va. Const. art. V, § 7

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2022/21-102-Herring-Sullivan-Issued.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

COMMONWEALTH of VIRGINIA

Office of the Attorney General

Mark R. Herring
Attorney General
202 North Ninth Street
Richmond, Virginia 23219
804-786-2071
Fax 804-786-1991
Virginia Relay Services

January 11, 2022

The Honorable Charniele L. Herring
Member, Virginia House of Delegates
Post Office Box 11779
Alexandria, Virginia 22312

The Honorable Richard "Rip" Sullivan
Member, Virginia House of Delegates
Post Office Box 50753
Arlington, Virginia 22205

Dear Delegates Herring and Sullivan:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issue Presented

You ask whether the Governor, solely through an executive order or other executive action, can repeal or eliminate the regulatory requirement that electric utilities and other electricity producers hold carbon dioxide allowances that equal the amount of their carbon dioxide emissions.

Discussion and Analysis

The Clean Energy and Community Flood Preparedness Act (the "Act") was passed by the General Assembly in 2020, amended Va. Code § 10.1-1330. The Act directs the Virginia Department of Environmental Quality to amend its regulations that established a carbon dioxide cap and trade program to reduce carbon dioxide emissions. Section 10.1-1330(B) authorizes the Director of DEQ "to establish, implement, and manage an auction program to sell allowances into a market-based trading program consistent with the [Regional Greenhouse Gas Initiative] program and this article."

Consistent with the Act's requirements, DEQ issued amendments to its CO2 Budget Trading Program regulations. Pursuant to those regulations, an owner or operator of a CO2 budget source, such as an electric utility, must "hold CO2 allowances . . . in an amount not less than CO2 emissions that have been generated as a result of combusting fossil fuel" for a given time period. Put differently, in order to lawfully produce electricity in Virginia by combusting fossil fuels, producers must now hold carbon dioxide allowances that equal the amount of their carbon dioxide emissions. One of the ways producers obtain CO2 allowances in order to comply with this regulation is by purchasing them through the Regional Greenhouse Gas Initiative auction. You have asked whether the Governor may, through an executive order or other executive action, do away with this regulatory requirement.

A recent Attorney General opinion discussed the separation of powers doctrine with respect to the Governor's power to alter tax laws. The same rationale applies to validly enacted laws. The Constitution of Virginia does not grant the Governor the power to suspend laws, and in fact, it requires the opposite that "[t]he Governor shall take care that the laws be faithfully executed." Article I, § 7 of the Constitution of Virginia provides "[t]hat all power of suspending laws, or the execution of laws, by any authority, without consent of the representatives of the people, is injurious to their rights, and ought not to be exercised."

A previous Attorney General opinion explained the interplay between these sections of the Constitution. "Thus, the prohibition that is implicit in Article V, § 7's 'take care' clause is made explicit by Article I, § 7: the Governor may not unilaterally direct, by any means, that a validly adopted regulation that has the force of law be suspended or ignored." In my opinion, the Governor may not repeal or eliminate, through an executive order or other action, the enacted statutes and regulations pertaining to the Commonwealth's participation in the Regional Greenhouse Gas Initiative and/or a market-based trading program like the Regional Greenhouse Gas Initiative, or do away with the requirement that electricity producers hold carbon dioxide allowances that equal the amount of their carbon dioxide emissions.

Conclusion

Accordingly, it is my opinion that the Governor may not, solely through an executive order or other executive action, repeal or eliminate the regulatory requirement that electric utilities and other electricity producers hold carbon dioxide allowances that equal the amount of their carbon dioxide emissions.

With kindest regards, I am,
Very truly yours,

Mark R. Herring
Attorney General