Rediscovering Thomas Jefferson’s Revolutionary Charge Against Abusive Taxation Schemes

Virginia ratepayers smacked with 153 Percent Increase in Auction Prices used to determine carbon tax.

Thomas Jefferson would not be a fan of the energy tax plan his gubernatorial successor has coerced into place this year at the expense of ratepayers and without public input. 

The second governor of Virginia and third president of the United States argued that small farmers who lived off their own land should pay little or no federal taxes. Jefferson also opposed the Excise Whiskey Tax of 1791 because, in his view, the tax provided the federal government with too much power. Moreover, this Founding Father, along with his fellow Virginians, took on the Stamp Act of 1765 that led to the American Revolution.

By contrast, Gov. Abigail Spanberger (D), who assumed office this past January, has implemented what some policy analysts aptly describe as a "backdoor carbon tax" that could add $1 billion in electricity costs over the next year. That process began this past summer when Spanberger had Virginia rejoin the Regional Greenhouse Gas Initiative, widely known as RGGI, a multistate climate change plan advertised as a "cap and trade" regulatory scheme. Spanberger bypassed the traditional public comment period along the way toward cementing the climate initiative back into place. She also did not allow for a vote from the state’s Air Pollution Board, which would be the normal procedure.

The 153 Percent Increase in Auction Prices

Power generators in RGGI states must purchase an allowance for every ton of carbon dioxide their plants emit from using coal, oil, or natural gas. They then pass the cost of that allowance onto consumers in their electricity bills. That’s where the carbon tax comes into play.

RGGI holds quarterly auctions to determine what the allowance costs will be. The latest round came in with an enormous price hike, meaning Virginia ratepayers will need to hold onto their wallets. The September 9 auction came in at $37.65 per allowance in comparison to $14.88 in December 2023, which was the last auction Virginia participated in before Republican Gov. Glenn Youngkin exited RGGI. That’s a 153 percent increase.

A carbon tax is a tax on every human activity imaginable since it ties a fee to greenhouse gas emissions that flow out of fuel production and consumption. Even the most mundane activities would involve carbon taxes. Anyone going out to the store to buy groceries, deliver mail, or pick up the kids at school will be paying carbon taxes. This is what Spanberger has unleashed in a state where Jeffersonian antipathy toward intrusive government policies once held sway, and she’s not done yet.

In September, the governor signed an executive order that could pull hundreds of artificial intelligence data centers into RGGI. If Spanberger succeeds, these data centers could soon be competing with Dominion Energy Virginia and other retail electricity producers in RGGI’s quarterly auctions. This added layer of participation would only serve to put upward pressure on consumer electricity bills.

But what should most unsettle Virginia ratepayers is the fact that the specter of higher costs associated with RGGI was evident even before the September auction. Back in June, Federal Energy Regulatory Commission (FERC) Chairman Mark Cristie noted that a filing from Dominion with the Virginia State Corporation Commission for the purpose of recovering RGGI costs tells a sobering story. The typical residential consumer is projected to pay $13 more per month, which adds up to $156 per year. Ouch!! That’s bad enough, but keep in mind this filing was made before the higher prices kicked in with the September auction.

Dominion's new filing to recover RGGI costs indicates that it will cost the typical residential consumer an additional $13 per month ($156 per year). Filing linked below. Business and industrial customers will see increased bills as well.https://t.co/lBjuD4yFAK

— Mark C. Christie (@ChristieFERC) June 10, 2026

The new clearing price of $37.65 per ton of carbon emissions RGGI announced on September 11 is 8 percent higher than the price set in June and 69 percent higher than it was a year ago in September 2025.

Where is All This Money Going? 

Stephen Haner, an energy and environmental policy analyst for the Jefferson Forum, has some answers. Virginia’s new sale of carbon allowances is expected to pull in $259 million from electricity producers along with allowance market speculators. As a matter of law, more than half of this amount is to be used for energy conservation projects benefiting low-income households. Some of the money may go into flood mitigation efforts. 

In June, the Virginia General Assembly voted to create a refund for residential consumers, small businesses, and churches paying the carbon tax. Only about 45 percent of the tax is expected to go back into rebates. 

Dominion’s largest customers (think in terms of large industrial centers, retailers, and possibly data centers) will not receive any rebates. So, who are the real winners in the RGGI scheme? It would seem government officials looking to pull in more tax dollars, alongside a few well-connected special interests, come out on top.

Haner told Restoration News that a genuine “cap and trade” system is not at work in Virginia and utilities can have incentives to hold onto their allowances rather than selling them. He said,

RGGI is not about carbon reduction. It is about revenue enhancement. The allowances are granted to the states, not to the utilities. The states sell the allowances either to a utility or a secondary investor. There is a cap, and that cap does go down with every contract year. There is trading, and, in theory, if a utility had a surplus of allowances, it could sell them on the secondary market, but it makes more sense to hold them and buy fewer next time. If you bought it at $25, the one you don’t have to buy might be $35, so better to hold it. But in the true cap-and-trade model, the allowance would have been issued to the utility based on its initial need, and then the shrinking cap would be giving it fewer and fewer allowances to use, forcing it to go bid to buy from someone else.

Virginia ratepayers appear to be stuck with carbon taxes for the time being. But it’s possible that demand from data centers could push RGGI to the breaking point. Spanberger’s ploy to avoid public comments could also lead to legal challenges. Other RGGI states might also balk at the rising prices coming out of Virginia. There’s also the possibility that these other states could exit the program. In Delaware, there’s a bill to do exactly that. The other problem Spanberger and crew have is that the one large energy-producing state that had briefly been in RGGI has already pulled out. That would be Pennsylvania, which never participated in any auctions to begin with because of legal complications. Gov. Josh Shapiro (D) pulled Pennsylvania out of RGGI last November. Apparently, it had become clear to the governor that the coalition of industry and labor groups opposed to the plan had the upper hand in court.

Another cautionary tale for Virginia comes from the Institute for Energy Research (IER), which has released an updated version of its report "Blue States, High Rates." IER points to RGGI participation as one of the key factors behind rising energy prices in certain states.

Virginia had a reprieve from carbon taxes under Youngkin, whose resistance to RGGI offers a sharp Jeffersonian contrast to Spanberger. The good news is that it may not be too late for the state to turn back. The Virginia governor cannot run for consecutive terms, and the carbon tax plan could become very unpopular very fast.

As president, Jefferson eliminated the excise tax on whiskey in 1802. By then, the country had ripened toward his message. Jefferson believed the phrase "to provide for the general welfare" was meant as a strict limit, so taxation was constrained to funding enumerated constitutional powers.

That’s not what the carbon tax is about since it provides government officials with wide latitude to put a price on productive activity. Virginia residents who find they can’t move more than two inches without paying the carbon tax will hopefully come to understand the unfortunate reality they now face and vote to restore their earlier, prouder Jeffersonian traditions.

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