Bipartisan bill in Va. chips away at Dominion’s excess profits
Called the Fair Energy Bills Act, the measure would reinstate the authority of the State Corporation Commission to review electricity base rates and set profit levels for Dominion.
Much of that authority was stripped away in 2015 when the General Assembly agreed to freeze base rates and prevent the commission from ordering the utilities to return excess profits to ratepayers.
At the time, Dominion had argued that it needed the freeze because the uncertainty of the Obama administration’s Clean Power Plan threatened its financial stability. The Trump administration killed the Clean Power Plan, but the seven-year freeze on base rates remained in place.
Ware and Jones said they want the commission to have full authority to examine base rates and order refunds when it conducts a four-year review in 2021.
“This bill is aimed at ensuring there will be a clean rate case and no overcharging by public utilities,” said Ware, who introduced a measure in the 2019 General Assembly session that would have prevented Dominion from charging consumers for building its $7 billion Atlantic Coast natural gas pipeline. The bill passed the GOP-controlled House of Delegates but died in the Senate, which was also controlled by Republicans.
“I’m not sure there was an appetite for legislation of this nature,” Jones said, “but with these historic elections the last couple of cycles, I think we’ve gotten to the point where there is an overwhelming appetite for some reform.”
Democrats won majorities in both the House and Senate in the Nov. 5 election, and many of them ran on promises to get tough with Dominion. Several dozen refused to take campaign contributions from the utility, which has long been the biggest single corporate donor to members of both parties.
Sen. Chap Petersen (D-Fairfax City) has introduced a measure for the January session that would ban all campaign contributions from public interest corporations such as utilities. Other measures aimed at imposing more controls on Dominion are in the works: A bipartisan coalition of advocacy groups has called for breaking up the utility’s monopoly on power generation and restricting it to power transmission and distribution.
“I certainly would be open to that as long as we can ensure that electricity is delivered dependably and at reasonable rates,” Ware said.
A spokesman for Dominion reacted cautiously to Jones and Ware’s proposal, noting that there is not yet any legislative language available to review. “We feel like we’re keenly focused on providing a great value to the customer . . . even as we continue to invest in offshore wind, reliability, keeping the lights on and serving our customers,” spokesman Rayhan Daudani said.
The measure “empowers the SCC to examine Dominion Energy’s earnings, set its allowed profit level, and direct the monopoly to lower rates and issue refunds if it overcharges customers,” according to a summary of the bill.
The sponsors noted that the commission has found that Dominion overcharged customers by more than $1.3 billion since the freeze went into place. They argue that the lack of rate review means Virginians’ electricity bills no longer reflect simply the cost to produce and distribute energy, but include enormous extra profits.
Critics say Virginians, by some measures, pay the seventh-highest energy bills in the nation. Dominion contests that claim as leaving out factors such as weather and usage and says Virginia’s rates are in line with or below the national average.
Jones and Ware said they are concerned that low-income Virginians are being stressed by the state’s electricity rates. The Virginia Poverty Law Center and the Southern Environmental Law Center both endorsed the legislation as a way to help families in need.
The proposed measure would not address the utility regulation overhaul passed by the General Assembly in 2018, which restored some commission oversight but allowed Dominion to use excess profits to pay for renewable-energy projects instead of giving refunds to customers.
That overhaul granted some ability for the SCC to review Dominion’s base rates, but set a limit of $50 million on the agency’s authority to cut rates. Advocates say that’s effectively no authority at all because the actual amount of over-earning is so much greater.
Daudani said the overhaul, which passed with bipartisan support, proves the regulatory system is functioning as it should. “The General Assembly is setting the policy direction for the state, and the regulator is making sure those policies are carried out in a way that’s prudent for the customer,” he said.
He said any effort to tinker with that balance “is going to require careful deliberation” — something Jones and Ware predicted the General Assembly is ready to undertake.
“I get constituent calls about it regularly enough that it’s become an issue that’s not partisan anymore,” Jones said.
“I think both parties and all people of goodwill have a stake in having fair utility regulation of a monopoly public utility,” Ware said.