VOLUME 44, ISSUE 2
INSIGHTS
Distributed quarterly by mail and email, the Conservative Caucus of Delaware's newsletter contains relevant information and insights from noted leaders, authoritative stakeholders and like-minded members who demonstrate their passion for the truths we hold dear by putting pen to paper!
Ratepayers Overcharged for Failed Green Energy Policy
On February 12, 2026, the federal Environmental Protection Agency formally repealed the 2009 Endangerment Finding as it applied to motor vehicle greenhouse gas standards — the legal determination that carbon dioxide is an air pollutant subject to federal regulation under the Clean Air Act. A parallel EPA rulemaking to repeal all greenhouse gas limits for coal- and gas-fired power plants is underway and expected to follow.
The implications for Delaware ratepayers are direct and immediate:
Delaware continues collecting tens of millions of dollars annually from
electricity customers to address an “endangerment” the federal government is systematically dismantling.
Senate Bill 65, sponsored by Sen. Gerald Hocker (R. 20th) and Rep.
Bryan Shupe (R. 36th), deserves
serious consideration as a straight-forward response to a program whose legal foundation, economic logic, and physics have all collapsed
simultaneously.
On March 10, 2026 — less than four weeks after the EPA repealed the Endangerment Finding for vehicle emissions — the Delaware Department of Natural Resources and
Environmental Control (DNREC)
issued Start Action Notice 2026-02, initiating rulemaking to amend 7 DE Admin. Code 1147 — the state’s CO₂ Budget Trading Program — to
incorporate 2025 RGGI program
revisions. Those revisions adjust
Delaware’s share of the regional cap for 2027 through 2037, restructure
reserve mechanisms, and remove offsets from the program beginning in 2027. DNREC is pressing forward to lock Delaware deeper into the Regional Greenhouse Gas Initiative (RGGI) at the precise moment the federal legal framework undergirding that program is being withdrawn.
On March 18, 2026, a request for a formal public hearing on those
proposed amendments was submitted. A follow-up letter has placed DNREC on notice that the hearing must be conducted as a genuine formal proceeding under Delaware’s Administrative Procedure Act — with sworn testimony, subpoena
authority, and a verbatim transcript — not as a public comment session by
another name.
The Legal Foundation Is Gone
RGGI was constructed in the shadow of federal climate policy. Its architects
assumed EPA’s authority to regulate greenhouse gases was settled law and that a federal carbon price was coming. Neither materialized. The Supreme Court’s 2022 decision in West Virginia v. EPA, 597 U.S. 697, established that agencies cannot claim transformative regulatory authority without clear Congressional authorization — precisely the Obama Administration
precisely the Obama Administration
created when it converted a narrow 2007 Supreme Court holding into a sweeping mandate to regulate CO₂ across the economy.
In that earlier case, Massachusetts v. EPA, 549 U.S. 497, the Court ruled five to four only that greenhouse gases fit the Clean Air Act’s definition of air pollutants and that EPA was required to decide whether they endangered public health — not that EPA had authority to regulate CO₂ across the entire economy. Congress never voted to make carbon dioxide a regulated pollutant. The EPA is now officially acting on that conclusion.
A Rounding Error on a Global Scale
Delaware’s share of global CO₂
emissions is unmeasurable. Asia’s
emissions continue to grow. China alone is adding coal generation capacity at a pace that dwarfs anything RGGI’s
participating states emit. Delaware’s
contribution rounds to zero.
Delaware ratepayers paid $38 million into this program in 2023. Since 2008, that bill has totaled $252 million.
RGGI’s defenders said that money buys cleaner air and a better climate. It
bought neither. What it actually buys is money for state agencies, power for regulators, and influence over the
energy choices of every Delaware
family and business.
The Market Mechanism Is
a Fiction
Cap and trade is simple in theory. The participating states set a regional ceiling on total CO₂ emissions from power plants with generating capacity above 25 megawatts. They issue allowances up to that ceiling. Each allowance
authorizes the emission of one short ton of CO₂. Every regulated plant must hold allowances covering its emissions. The price of allowances is set by the market. A tight cap produces scarce allowances, a high price, and a strong incentive to reduce emissions. That is the promise.
The ceiling was not derived from science. It was negotiated among the states based on their existing historical emission levels and allocated among them proportionally. A cap set at the level of emissions already occurring compels nothing.
The reality confirmed that judgment. The regional allowance cap was set above actual emissions at the program’s 2009 launch, meaning it never compelled a single ton of actual reductions in its first years. When the cap was eventually tightened, it was reset near actual emissions each time — the cap following emissions down rather than pulling them
down. More fundamentally, RGGI’s
price ceiling mechanism releases additional allowances into the market whenever prices rise high enough to actually drive reductions — blunting the price signal at precisely the moment the market would otherwise work. Non-compliance entities including financial institutions and trading firms hold approximately 41% of banked allowances, driving up prices paid by ratepayers without reducing a pound of CO₂.
The Wrong Bill Is Also Before the Committee
Also pending is Senate Substitute 1 for Senate Bill 64, which leaves Delaware in RGGI but redirects proceeds above 2025 levels back to ratepayers as electricity bill rebates. It should be rejected. That bill accepts the premise that this tax is legitimate and argues only about how the proceeds get divided. It permanently institutionalizes revenue streams flowing to state agencies and the Sustainable Energy Utility, doing business as Energize Delaware, returns a fraction of what ratepayers paid after established programs take their cut, and leaves the compliance cost embedded and hidden in the supply charge of every electricity bill. A rebate of a tax does not undo the tax. The problem is not how RGGI proceeds are spent. The problem is that Delaware is collecting them at all.
The Grid Cannot Reach Zero
RGGI’s stated trajectory is a cap declining toward zero by the mid-2030s. The physics of grid reliability will not allow it. Solar and wind generate when the resource is available, not when customers need power. Natural gas combustion turbines — the only commercially available technology that can ramp to full output on minutes’ notice and sustain output indefinitely — are not optional. They are the load-following backbone of any grid that must work when the sun does not shine and the wind does not blow. Driving carbon allowances to zero while expecting the grid to function is not a climate policy. It is a guarantee of blackouts or rationed electricity.
The federal government is withdrawing the legal basis for treating CO₂ as a pollutant — first for vehicles, and soon for the power plants RGGI directly taxes. DNREC is responding by doubling down and extending the program through 2037. The grid cannot function without the emissions this program taxes. Delaware’s sacrifice is a rounding error. The General Assembly should pass Senate Bill 65. ■
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