Regional Greenhouse Gas Initiative RGGI

Regional Greenhouse Gas Initiative (RGGI)

RGGI is a cooperative, regional effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia (participating RGGI states) that since 2009 has helped reduce electric power sector CO₂ emissions. Through 2025, RGGI has contributed to a 47 percent reduction in annual CO₂ emissions from covered power plants in the region, relative to 2005 emissions levels. RGGI also provides significant funding to support electric rate relief for all Connecticut ratepayers and to support energy efficiency, clean energy, and clean transportation investments that help lower energy bills and provide other consumer benefits. Independent studies of RGGI have concluded that the program has provided regional net economic benefits, including enhanced economic growth and job creation, as well as significant health benefits from improved air quality resulting from the initiative.

Under RGGI, fossil-fuel-fired electric power generators with a capacity of 25 megawatts or larger in participating RGGI states must purchase and surrender “allowances,” each corresponding to one short ton of CO₂, equal to their total CO₂ emissions. RGGI allowances are sold at quarterly auctions by Connecticut and the other RGGI participating states. The number of allowances made available each year, known as the annual CO₂ allowance “budget” or “cap,” declines over time, requiring power plants in the region to reduce their emissions over time.

RGGI’s allowance auctions generate funds, which per CGS Section 22a-200c and DEEP’s implementing regulations are used to provide electric rate relief to all Connecticut ratepayers; support energy efficiency, clean energy, and clean transportation programs in the state; and cover the costs of administering the program. As of June 2026, Connecticut has received $627 million in RGGI auction proceeds since the first allowance auction in September 2008. These funds have been used to lower energy expenses and provide other benefits to Connecticut consumers, including $117 million for electric rate relief via the Public Utilities Regulatory Authority (PURA); $338 million to support energy efficiency investments in the state, including through the utility-administered Conservation & Load Management Programs; and over $100 million to support clean energy investments through the Connecticut Green Bank and clean vehicle rebates for Connecticut consumers through the Connecticut Hydrogen and Electric Automobile Purchase Rebate (CHEAPR) program. Connecticut and the other participating RGGI states release annual Investment of Proceeds reports documenting these investments and their benefits.

DEEP implements RGGI in Connecticut through regulations adopted in accordance with CGS Section 22a-200c(a), which requires: “The Commissioner of Energy and Environmental Protection shall adopt regulations, in accordance with chapter 54, to implement the Regional Greenhouse Gas Initiative.”

Proposed 2026 Amendments to Sections 22a-174-31 and 22a-174-31a of the Regulations of Connecticut State Agencies (RCSA)

The participating RGGI states conduct regular regional program reviews to consider potential updates to RGGI, to be implemented in each state’s corresponding RGGI regulations. On two previous occasions Connecticut has adopted conforming amendments to its RGGI regulations to implement consensus updates developed as part of thorough program reviews conducted by the participating RGGI states with stakeholders. This last happened, following Legislative Regulation Review Committee (LRRC) approval, in 2019 to implement updates agreed to by the participating RGGI states in 2017. An earlier review, completed in 2013, also resulted in updates that DEEP adopted and implemented, following LRRC approval. Adopting the agreed-to updates following these regional program reviews is required for RGGI participating states to continue to participate in RGGI and to receive its benefits, including from RGGI-funded ratepayer relief and energy efficiency and other clean energy investments.

The proposed conforming amendments in 2026 to DEEP’s RGGI regulations would implement, effective January 1, 2027, consensus updates that RGGI participating states agreed to following the most recent RGGI program review in July 2025. These updates will modernize a few sections of Connecticut’s RGGI regulations contained in RCSA Section 22a-174-31 and repeal RCSA Section 22a-174-31a entirely. These regulatory updates are required for Connecticut to continue to participate in RGGI and to receive its benefits. The other RGGI participating states are likewise updating their state regulations in accordance with the July 2025 agreement.

Because all of Connecticut’s state neighbors participate in RGGI, ISO New England regional wholesale energy markets will continue to reflect emitting generators’ RGGI compliance costs, which Connecticut ratepayers will pay for whether Connecticut participates directly in RGGI or not. Participating in RGGI, however, allows Connecticut to receive proceeds from the initiative, which are used to offset these wholesale market costs and provide affordability benefits to ratepayers. Updating Connecticut’s regulations as DEEP proposes is required to enable the state to continue participating in RGGI. If Connecticut fails to adopt these regulations, ratepayers will continue to pay wholesale market costs associated with RGGI but will no longer receive benefits from Connecticut’s investments of RGGI proceeds.

The conforming regulatory amendments will:

Require additional CO₂ emission reductions from covered fossil fuel-fired power plants between 2027 and 2037. By 2037, the RGGI cap will be reduced by between 61 and 90 percent below the 2026 level in Connecticut’s current rules. The level of reduction will be a function of the Cost Containment Reserve described in the next bullet.

Expand ratepayer protections. The updated regulation includes an expanded Cost Containment Reserve (CCR) that will automatically reduce the level of CO₂ emission reductions required (i.e., will increase the cap) if needed to keep allowance prices stable. The CCR releases additional allowances to the market if prices exceed a predefined threshold in RGGI’s quarterly auctions, thereby relaxing the emission reduction requirement and putting downward pressure on prices. RGGI’s existing CCR has helped ensure lower prices through the release of such allowances in response to market conditions. The conforming updates will expand RGGI’s CCR by increasing the number of allowances that can be released in future years. If all CCR allowances are released, the RGGI cap reduction would decrease from 90 to 61 percent by 2037, from 2026 levels.

Eliminate two allowance “set aside” accounts previously established under RCSA Section 22a-174-31. The Combined Heat and Power (CHP) Useful Thermal Energy Set-aside Account will be removed and replaced with a limited exemption from RGGI for CHP units in Connecticut. The Voluntary Clean Energy Purchase Set-aside Account, a component of the state’s RGGI program that has gone mostly unused for the duration of the program, will be removed.

Remove the Emissions Containment Reserve (ECR) previously established under RCSA Section 22a-174-31. The ECR is a mechanism that can lower the number of allowances made available if allowance prices at auction fall below a threshold price. This mechanism has never been triggered and is not expected to be triggered in the future. Therefore, the proposal eliminates the ECR in the interest of a more streamlined regulation.

Eliminate provisions related to the award of new CO₂ emission offset allowances. This proposal would repeal RCSA Section 22a-174-31a, which establishes requirements for CO₂ emission offset projects under RGGI that may be proposed for approval by DEEP, and it would remove corresponding provisions in RCSA Section 22a-174-31. No offset projects have been proposed in Connecticut for DEEP’s approval since RCSA Section 22a-174-31a was adopted in 2008. RGGI offset projects have similarly played minimal to no roles in the other states participating in RGGI. Any offset allowances awarded prior to January 1, 2027, could still be used for compliance in Connecticut, subject to existing limits on their use in RCSA Section 22a-174-31.

Remove expired and other outdated provisions that will no longer have regulatory effect by the time the updated regulation takes effect on January 1, 2027.

The proposed amendments to Connecticut’s RGGI regulations and related documents are posted on the Connecticut eRegulations System under Tracking Number PR2025-028. Adopting these amendments will ensure the continued availability of RGGI proceeds to support programs that benefit Connecticut consumers. The amendments will not change Connecticut’s allocation of RGGI proceeds. Under the updated regulations, Connecticut will continue to invest proceeds from RGGI’s quarterly CO₂ allowance auctions in programs that reduce bills, including energy efficiency and rate relief.

Written Comments

Interested persons are invited to provide written comment on the proposal. Comments should be submitted no later than 5:00 p.m. EDT on Monday, August 3, 2026, via the Connecticut eRegulations System under Tracking Number PR2025-028 or electronic mail to DEEP.EnergyBureau@ct.gov with “RGGI Rulemaking Comment” in the subject line.

Public Hearing

In addition to the opportunity to provide written comments, DEEP held a virtual public hearing to receive oral comments on the proposed amendments on July 23, 2026. Hearing minutes, a link to a video recording of the hearing, and a copy of the slides presented are available in the eRegulations system under Tracking Number PR2025-028 and can also be directly accessed here.

Current Connecticut RGGI Regulations

The current rules for administering RGGI in Connecticut are: