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

In 2020, the Virginia General Assembly passed the Clean Energy and Community Flood Preparedness Act, which amended Va. Code § 10.1-1330 and directed the Department of Environmental Quality (DEQ) to amend its regulations setting up Virginia's CO2 cap-and-trade program. Section 10.1-1330(B) authorized DEQ to manage an auction program for selling CO2 allowances consistent with the Regional Greenhouse Gas Initiative (RGGI), a multi-state carbon-trading program.

DEQ followed up with regulations (9 Va. Admin. Code § 5-140-6050(C)) requiring electric utilities and other CO2 budget sources to hold allowances equal to their actual CO2 emissions. To get allowances, producers can buy them at RGGI auctions.

Delegates Charniele Herring and Rip Sullivan asked the Attorney General whether the Governor, by executive order, could end this CO2 allowance requirement (and effectively pull Virginia out of RGGI without action by the General Assembly).

The AG said no. The framework follows AG Opinion 21-087 (issued just weeks earlier) on the Governor's lack of unilateral tax-altering authority. The Virginia Constitution puts taxing and legislative authority in the General Assembly. The Governor's job under Va. Const. art. V, § 7 is to "take care that the laws be faithfully executed." Article I, § 7 says all power of suspending laws without consent of the legislature "ought not to be exercised." A 2014 AG opinion had already explained: "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 same logic applies to the Clean Energy and Community Flood Preparedness Act's CO2 allowance requirement. It was enacted by the General Assembly. DEQ regulations implementing it have the force of law. The Governor cannot, by executive order alone, repeal the law or the regulations.

What this means for you

For the Governor and executive branch

The opinion holds that the Governor may not, by executive order or other executive action, repeal or eliminate the Clean Energy and Community Flood Preparedness Act or the DEQ regulations that implement it. The AG reads Article V, § 7's "take care" clause together with Article I, § 7's anti-suspension provision to bar a Governor from unilaterally suspending a validly enacted statute or a regulation that has the force of law.

For electric utilities and other CO2 budget sources in Virginia

The opinion holds that the CO2 allowance requirement remains in effect unless the General Assembly amends the statute. On the AG's reasoning, an executive order purporting to suspend the requirement would be void, because the DEQ regulations carry the force of law.

For state legislators

The opinion holds that the power to repeal or amend the Act, and thus to change Virginia's RGGI participation as a matter of state law, sits with the General Assembly rather than the Governor. The AG frames any executive attempt to do so as outside the Governor's constitutional authority.

For environmental advocates

The opinion concludes that the CO2 program cannot be dismantled by executive order alone; it holds that any change to Virginia's RGGI participation requires legislative action, or regulatory action that stays within the statute.

Common questions

What is RGGI?
The Regional Greenhouse Gas Initiative, a cooperative effort among Northeast and Mid-Atlantic states (currently or formerly including Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia) that operates a market-based program to cap and reduce CO2 emissions from the power sector.

When did Virginia join RGGI?
Through the 2020 Clean Energy and Community Flood Preparedness Act, effectively. Virginia formally joined RGGI in 2021.

What does the Clean Energy Act require Virginia utilities to do?
Under DEQ regulations implementing the Act (9 Va. Admin. Code § 5-140-6050(C)), an owner or operator of a CO2 budget source (like an electric utility burning fossil fuels) must hold CO2 allowances in an amount not less than the actual CO2 emissions during a given period.

Can the Governor end RGGI participation by executive order?
No. The Clean Energy Act is a statute. The DEQ regulations implementing it have the force of law. The Governor lacks constitutional authority to unilaterally repeal a statute or to suspend regulations that lawfully implement a statute.

What's the constitutional basis for this limit on the Governor's power?
Article V, § 7 of the Virginia Constitution requires the Governor to "take care that the laws be faithfully executed." Article I, § 7 explicitly bars suspending laws without legislative consent. Together they bar unilateral executive nullification of duly enacted laws and regulations.

Can DEQ change its regulations to alter the CO2 allowance requirement?
DEQ can amend regulations through proper notice-and-comment rulemaking, but the amended regulations must remain within the bounds set by the statute. If DEQ tried to eliminate the allowance requirement entirely, that would likely be ultra vires given § 10.1-1330's mandates.

What happens if a Governor issues such an executive order anyway?
Per the AG, the order would be void. Affected parties could challenge in court. A 2014 AG opinion noted that an executive order that "amounts to an exercise of legislative power or violates a provision of the Virginia Constitution" is "necessarily void."

Background and statutory framework

The Clean Energy and Community Flood Preparedness Act was passed by the General Assembly in 2020. It amended Va. Code § 10.1-1330 to direct the Department of Environmental Quality to amend its regulations establishing a CO2 cap-and-trade program. Subsection (B) of § 10.1-1330 authorized 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."

DEQ's implementing regulations (9 Va. Admin. Code § 5-140-6050(C)) require CO2 budget sources to hold CO2 allowances equal to their emissions. The auctions held by RGGI provide the market mechanism to acquire those allowances.

The AG's analytical framework is the same one used in 21-087 (which addressed the Governor's tax-altering authority): Va. Const. art. V, § 7's "take care" clause is read together with Va. Const. art. I, § 7's anti-suspension provision. The 2014 AG opinion made the principle explicit: "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."

That principle applies to both validly enacted statutes (the Clean Energy Act) and validly adopted regulations (the DEQ implementing regulations).

Citations

• Va. Code § 2.2-505 (AG advisory opinions)
• Va. Code § 10.1-1330 (Clean Energy and Community Flood Preparedness Act amendment)
• 9 Va. Admin. Code § 5-140-6050(C) (CO2 allowance requirement)
• Va. Const. art. I, § 7 (anti-suspension provision)
• Va. Const. art. V, § 7 (Governor's duty to enforce laws)
• 2021 Op. Va. Att'y Gen. No. 21-087 (Governor's lack of tax-altering authority)
• 2014 Op. Va. Att'y Gen. 43

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