North Carolina budget blocks RGGI entry

North Carolina lawmakers have clinched a long-awaited budget agreement that includes language preventing state regulators from requiring power plants to join carbon trading programs, including the Regional Greenhouse Gas Initiative (RGGI).

The budget provision effectively targets the state Department of Environmental Quality, which had been looking at joining the RGGI power plant CO2 cap-and-trade program through rulemaking. North Carolina, with its multiple coal-fired power plants, would have been a major source of emissions and allowance demand in the multistate program.

The state government is unable to require electric utilities "to obtain allowances to offset their CO2 emissions" or to enter into "any agreement with other states" to do so, the final fiscal year 2023-25 budget says. The state House of Representatives voted 70-40 and the state Senate voted 26-17 to approve the budget late last week.

North Carolina governor Roy Cooper (D), while sharply critical of the months-late budget, indicated that he will let it become law without his signature. Republicans have large enough majorities in both chambers to override any veto, limiting Cooper's ability to request changes, and five Democratic members of the House voted in favor of the final budget.

"Make no mistake. Overall, this is a bad budget that seriously shortchanges our schools, prioritizes power grabs, keeps shady backroom deals secret and blatantly violates the constitution, and many of its provisions will face legal action," Cooper said.

The North Carolina Department of Environmental Quality, which did not respond to a request for comment, said last year that it was planning to launch a rulemaking that would allow the state to start participating in RGGI by the beginning of 2024.

But there have been few updates from state regulators since then.

RGGI executive director Andrew McKeon earlier this month said there were few obvious prospects for new states outside Pennsylvania to join and that prospects for North Carolina joining were grim.

By Cole Martin