By Kate Andrews
Richmond-based Dominion Energy Inc. recorded more than $500 million above authorized earnings levels from 2017 to 2019, according to a State Corporation Commission report released Tuesday.
The report, which was sent to Gov. Ralph Northam and the House and Senate labor and commerce committee chairs, says that the publicly traded Fortune 500 utility earned $300.8 million in 2017 and $277.3 million in 2018 over the state-determined 9.2% return-on-equity base.
In 2019, however, the utility was below the authorized limit, with 8.03%, or $75.4 million less than the ROE base — mainly because of the closure of generation facilities and costs related to coal byproducts management at four facilities.
Dominion’s combined earnings over the limit during the three-year period are $502.7 million, the company reported to the SCC.
Dominion’s return on equity is the allowed profit for its shareholders’ investment in the utility’s equity. Last November, the SCC rejected Dominion’s proposed increase of the return on equity base from 9.2% to 10.75%.
According to the report, a typical residential Dominion customer pays $26.10 (28.81%) more per month now than in 2007, with the average residential monthly electric bill totaling $116.69.
Advocacy group Clean Virginia called Tuesday for legislative reforms to prevent overcharging by the utility. “Virginians — particularly Black and brown households — were already struggling with high energy burdens and rising electricity bills before the COVID-19 crisis and economic fallout,” Executive Director Brennan Gilmore said in the statement. “Lawmakers can easily soften the blow for families and small businesses by requiring Dominion Energy to shoulder its fair share of COVID-related utility debt from the half a billion dollars it has already taken from Virginians and return the rest of it to the people and businesses they overcharged.”
The SCC currently does not have the authority to refund the money to customers or lower base rates to prevent overcharges, Clean Virginia added.
During the regular General Assembly session, the Fair Energy Bills Act introduced by Del. Lee Ware, R-Powhatan, and Del. Jerrauld C. “Jay” Jones, D-Norfolk, would have allowed the SCC to review electricity base rates and set profit levels for Dominion, an authority the commission had until 2015. However, a Senate panel killed the bill in March after it cleared the House on a 77-23 vote.
Dominion released its own statement in response to the report: “As always, we will review the SCC’s latest report on earnings, while recognizing that it represents an interim assessment. We are looking forward to next year’s comprehensive review by the SCC of customer rates and our performance, a so-called ‘triennial review’ that will cover the 2017 to 2020 period. That proceeding will present an opportunity for a review of the investments we have made on behalf of our customers. We’re proud of our record and of the changes underway at the company. We have kept rates well below the national and East Coast averages and maintained a strong record of reliability, while building the nation’s leading clean-energy portfolio.”
The SCC will conduct a more comprehensive survey next year, including 2020’s ROE base results. It’s too early to tell yet, but so far in 2020, Dominion has recorded $630.7 million in costs related to closure of three power stations in Chesterfield County and Yorktown in the first quarter of the year and $116.6 million in unpaid electricity bills as of June 30 since the state placed a moratorium on disconnections in March, the SCC reported last week. A spokesman said the utility is ready to extend the moratorium to October if regulators allow it.
According to the report, Dominion would owe 70% of the excess funds to its customers — currently $256.8 million, although the utility would be allowed to subtract $199.9 million invested in the Coastal Virginia Offshore Wind project and grid transformation work. That leaves approximately $57 million in refundable income, but that number could change by next year’s comprehensive report.
FOR IMMEDIATE RELEASE
Cassady Craighill, Clean Virginia Communications and Advocacy Director
August 18, 2020
BREAKING: Dominion Energy overcharged Virginians by $502.7 million since 2017
Legislative reform urgently needed during special session to respond to economic crisis and protect Virginia families and small businesses in 2021
Charlottesville — The State Corporation Commission (SCC) found that according to Dominion Energy’s own accounting, the monopoly has overcharged its customers by $502.7 million since 2017 — money collected from customers in excess of the monopoly’s authorized profit level, according to an annual report released today. Unless the General Assembly passes legislative reform during the special session, which begins today, the SCC will not have the full authority to refund this money to customers or lower base rates to prevent overcharges in the future.
“Virginians – particularly Black and Brown households – were already struggling with high energy burdens and rising electricity bills before the COVID-19 crisis and economic fallout. Lawmakers can easily soften the blow for families and small businesses by requiring Dominion Energy to shoulder its fair share of COVID-related utility debt from the half a billion dollars it has already taken from Virginians and return the rest of it to the people and businesses they overcharged,” said Clean Virginia Executive Director Brennan Gilmore.
The report’s findings include:
“The General Assembly must act immediately to protect Virginians, who especially during this economic crisis, simply cannot afford unfairly high electricity bills. Dominion has shown once again that it will employ every accounting trick possible to make the money it owes Virginians disappear,” Gilmore said. “In the face of an unprecedented economic and public health crisis, Virginians need a fair process determining the cost of their electricity bills more than ever. The General Assembly now has a singular chance to right the historic wrong of Dominion’s egregious overcharges and provide immediate relief for Virginians. This cannot wait.”
In deciding whether to approve the request, the State Corporation Commission must navigate new laws on utility regulation while considering questions and objections from businesses, environmental groups, advocates for low-income customers and others.
Some are questioning the accounting practice used by Appalachian to justify raising the price of its electricity.
In a legal memorandum filed with the SCC late last month, the Virginia Attorney General’s Division of Consumer Counsel said the increase is “neither appropriate from an accounting perspective nor in the interest of APCo’s ratepayers.”
Attorney General Mark Herring went further in a written statement to The Roanoke Times, saying he opposes the “unconscionable” request by Appalachian that would “lead to an unjustified increase for ratepayers.”
Appalachian has yet to file a response with the SCC. In a written statement last week, company spokeswoman Teresa Hall said: “We respectfully disagree with the Attorney General’s position; however, it would be inappropriate to comment further on a legal issue.”
The accounting practice in question stems from a convoluted regulatory process that has been repeatedly revised by the General Assembly.Under a law passed in 2018, whether a utility is entitled to raise its base rates is determined by its earnings over a three-year period immediately prior to the request. If earnings fall below a return on equity authorized by the SCC — 9.4% for Appalachian — the commission can approve a rate increase.
If, on the other hand, earnings over the triennial period exceeded the allowed rate, the utility could be prohibited from collecting even more revenue through a rate increase.
Appalachian’s return on equity was 11.3% in 2017 and 9.8% in 2018, which exceeded its allowed rate, according to an SCC filing by the Virginia Poverty Law center, one of nearly a dozen participants in the case.
In 2019, the utility’s rate dropped to 3.8%, bringing the average return on equity over the triennial to 8.2% — low enough for an increase to be requested, the poverty law center said in its filing.
In an assertion backed by the attorney general’s office, the filing states that Appalachian’s low rate in 2019 was due to its decision to offset earnings that year with the costs of the early retirement of fossil fuel-fired power plants.
That expense, which includes the shutdown of the Glen Lyn plant in Giles County and the partial closing and conversion of the Clinch River plant in Russell County, was nearly $90 million.
The problem with that, the attorney general’s office argues, is that the early retirements happened in 2015 and 2016, before the three-year period used to determine whether a rate increase is justified.
Only after Appalachian’s management realized that the company would nearly exceed its authorized rate of return did it adjust its accounting books in December 2019 — the final month of the triennial — in a way that allowed it to seek an increase, the attorney general maintains.
“The statute does not permit APCo to reach and snag out-of-period costs and expense them as if they were part of this Triennial Review period,” the legal memorandum states.
“Such a reading of the statute would permit an absurd result.”
‘A big test’
To fully understand what is happening, a bit of recent history is helpful.
In 2015, the General Assembly approved a rate freeze for Appalachian and Dominion, the state’s largest electricity utilities. Among other things, the law halted the ability of the SCC to lower base rates and issue refunds. Critics said it also locked in rates that were already too high.
Three years later, the freeze was lifted when legislators passed the Grid Transformation Security Act, which supporters said gave regulators more power over the electricity monopolies.
One of the many things the new law did was switch from a two-year period to the current triennial period to determine rates. Appalachian is the first to use the process; Dominion’s turn will come next year.
Critics of the 2018 law say it still deprived regulators of their full authority, allowing bookkeeping tactics that shortchanged customers. “They can fudge the accounting and make it look like they need to raise rates,” said Del. Sam Rasoul, D-Roanoke.
Rasoul co-patroned a bill that became law this year, giving the SCC the power to determine how to best handle the long-term recovery of costs associated with the early retirement of power plants.
The attorney general’s office contends that the law should prevent Appalachian from lumping all of the expenses into a single year. “But for this extraordinary earnings test adjustment,” its legal memorandum states, “the Company would be unable to justify its request to increase the rates paid by its customers.”
How Appalachian’s case plays out before the SCC will be “a big test of this bill, that’s for sure,” Rasoul said.
“It’s clear that we must have the SCC at full power to oversee these regulated monopolies,” he said. Otherwise, the utilities “are going to act in their best interests, at the expense of the ratepayers.”
However, it should come as no surprise that Appalachian is seeking to raise its base rates, which have remained the same for some years because of the freeze, said Greg Habeeb, a former member of the House of Delegates who heads the regulatory and government affairs practice group for the Roanoke-based law firm of Gentry Locke.
“The real question is whether the 2018 legislation and anything passed in 2020 changes the paradigm at all,” Habeeb wrote in an email.
For years, investor-owned utilities have fully depreciated a generation asset in a single year to offset earnings. The accounting practice has been “historically legal but is a controversial topic,” he wrote.
According to Habeeb, the law passed this year “was an under the radar screen bill, but many insiders think this bill alone would result in hundreds of millions of dollars in ‘overearnings’ being returned to ratepayers.”
It isn’t that the utilities have exceeded what they’re entitled to earn, Habeeb said, but rather that they are using the retirement of an expensive asset all in one year to offset earnings, which means they don’t have to make refunds to customers.
Not all of Appalachian’s rate request is connected to the early retirements of coal plants, Hall said.
“The increase is primarily tied to recovering the cost of ongoing investments in the company’s generating plants and distribution network to increase and enhance reliability, and to respond to customer demands for cleaner energy resources,” her written statement read. “The company continuously makes such investments, but has not had an increase in its base rates since 2011.”
An SCC hearing examiner is scheduled to take public comments Sept. 14 and hear testimony for several days. Michael Thomas will then make a recommendation to the full commission, which must decide by Nov. 30 on a rate increase that would take effect early next year.
In a motion filed last month, the Virginia Poverty Law Center asked Thomas to rule before the hearing on whether the 2020 law will apply to Appalachian’s rate request.
“Simply put, the case participants — and the public — have a right to know what kind of case this is,” the motion stated.
A matter of timing
News that Appalachian’s residential customers could face an increase of about $10 a month for every 1,000 kilowatts of electricity they use came at perhaps the worst possible time.
A press release from the utility was issued March 31, when it was becoming clear that the outbreak of the novel coronavirus was both a public health and financial crisis.
“Submitting a rate case during a pandemic is certainly not ideal, but we weren’t at liberty to change the date,” Appalachian spokeswoman Hall wrote in a statement last week.
The Grid Transformation and Security Act, passed three years before the word coronavirus became part of the country’s daily vernacular, required Appalachian to make the filing when it did.
But “nobody was holding a gun to the utility’s head, saying you must ask for more money,” said Dana Wiggins, director of the Center for Community Outreach at the poverty law center.
Appalachian is doing all it can to help customers during this difficult time, Hall said. It stopped disconnecting accounts for nonpayment on March 13 — several days before the SCC ordered most utilities to take that action — and has encouraged customers to make flexible payment arrangements while they regain their financial footing.
The utility is also proposing, as part of its request to the SCC, a new rate discount that will be available December through February of every year, Hall said.
Under the plan, customers with higher winter usage, such as those with electric heat, may see little or no increase, or even a decrease in their annual bills, she said. About 66% of the utility’s low-income customers heat with electricity.
But even more people may be defined as low-income before the virus’s financial damage wanes. “To some extent, yes, the pool of people we advocate for has increased,” Wiggins said.
“We’re all in a new normal, and the ground is shifting beneath us,” she said. If others can adjust to those changes, she asked, why can’t Appalachian?
Dominion CEO Thomas Farrell’s history of railroading Black communities and glorifying the Confederacy is under new scrutiny after the demise of his controversial pipeline.
By Alexander Kaufman
Summer 2014 was an exciting and nostalgic season for the most powerful unelected man in Virginia.
In May of that year, Dominion Energy CEO Thomas F. Farrell II made his cinematic debut with “Field of Lost Shoes,” a Civil War drama following the victorious Confederate cadets at the Battle of New Market. He had co-written, produced and financed the film. In addition to being a lawyer and the boss of a $62 billion Richmond, Virginia-based utility that serves 6.7 million people in eight states, Farrell is a history buff who said he pulled many of the movie’s lines straight from diaries and speeches of the time. Historians, however, say he added one glaring fiction to his film: depicting the young, white Rebel heroes as would-be abolitionists, who were either apathetic about or opposed to slavery.
Historical criticism aside, Farrell was still riding high on that premiere when, in September, he arrived in a blue suit at the historic state capitol building in Richmond to accept then-Gov. Terry McAuliffe’s support for the Atlantic Coast Pipeline, a natural gas project that Farrell hoped would define his legacy as one of his generation’s great industrialists.
“In the 19th century, we had railroads, the steam engine and the beginning of steel manufacturing. In the 20th century, we had the automobile assembly line, the internet and ― from my perspective, the most important of all ― the electric grid,” Farrell told reporters at the press conference, held on the hottest day in Richmond that year. “In the 21st century, the expansion of our natural gas pipeline network looks to be one of those key infrastructure developments.”
Six years later, the Atlantic Coast Pipeline project has been torpedoed by a mix of changing economics, accusations of environmental racism and climate recklessness. The collapse of the pipeline coincides with a national movement against anti-Black racism that has had particular resonance in Virginia, once home to the capital of the Confederacy. Critics of the racial impact of Dominion’s actions under Farrell’s leadership hope that, together with the financial loss from the pipeline project, the current political ferment could finally end his 14-year reign.
Under Farrell, Dominion has become a national symbol of how political corruption and monopoly power can undercut efforts to reduce the country’s dependence on fossil fuels. That was worked for Farrell so long as Dominion’s cash could buy it the acquiescence of state legislatures. But now Virginia and many other states are looking to transition to 100% carbon-free electricity, and Dominion’s shareholders are in revolt. In May, nearly 47% of those shareholders voted in favor of a proposal to require an independent board chair, which would have given Farrell ― who currently serves as both chairman and chief executive ― a boss. In early July, Dominion’s stock price plunged more than 11% after the company and its partner, North Carolina-based Duke Energy, announced the Atlantic Coast Pipeline’s cancellation. The stock price has yet to fully recover, even as the market rebounds.
Virginia progressives, who cheered the toppling of four Confederate monuments in Richmond in recent weeks, hope Farrell could be the next storied edifice to fall.
“Clearly there’s a need for new leadership and new direction,” said state Del. Sam Rasoul, a Democratic legislator from Roanoke. “Dominion has consistently operated counter to the interests of Virginians and … when you have a CEO who championed a film that essentially glorifies the Confederacy, with all that is going on, it’s clear that there’s a new mindset needed.”
Dominion declined to comment on the record, but internal messages show the company worried this story aimed to “tar” Farrell as part of a coordinated effort to damage the firm. In an on-background phone call, a spokesman pointed to the company’s recent commitments to donate $25 million to historically Black colleges and universities in Virginia, Ohio, North Carolina and South Carolina and to fund $10 million in scholarships for minority students. The spokesman also highlighted a corporate pledge in June to direct $5 million to “social justice” and “community rebuilding efforts.”
“At Dominion Energy, we have a saying that ‘Actions Speak Louder.’ We share the anger of our communities at the unjustified deaths of Breonna Taylor, Ahmaud Arbery and George Floyd,” Farrell said in a press release announcing the latter commitment. “Our communities are grieving. Words can evoke empathy, compassion and understanding, but actions truly speak louder. So, we are investing in recovery and reconciliation, and in the vital work of overcoming years of debilitating actions, attitudes and abuses of authority that have traumatized our country.”
The company denied a request to interview Farrell.
Opposition from environmental justice groups contributed to the demise of the Atlantic Coast Pipeline. The proposal would have sent the pipeline through Buckingham County, a rural, mountainous area roughly 90 minutes west of Richmond. Dominion also planned to erect a compressor station in Union Hill, a historically Black community in Northern Virginia that freed slaves founded in the 1800s before the Civil War.
Compressor stations, which use fuel from the pipeline to run a series of gas-compressing engines that keep fuel flowing through the pipeline, emit air pollutants that cause respiratory and cardiovascular problems. Dominion said the Union Hill permit that the Virginia Air Pollution Control Board had unanimously approved set limits on emissions four to 10 times lower than other recent permits granted in the state. But that still allowed for the release of a cocktail of pollutants, including nitrogen oxide, carbon monoxide and particulate matter.
For years, Union Hill residents protested and organized groups against the project. The Virginia NAACP condemned Dominion’s plans and urged regulators to halt permitting. In an August 2018 letter, the 15-member state Advisory Council on Environmental Justice urged Gov. Ralph Northam (D) to suspend the permits already granted and conduct a review of potential “civil and human rights violations” and “ensure that predominantly poor, indigenous, brown and/or black communities do not bear an unequal burden of environmental pollutants and life-altering disruptions.”
“We strongly disagree with the Advisory Council’s recommendations,” the company told The Washington Post at the time.
The company then proposed pouring $5.1 million into the Union Hill community, vowing to build a community center and fund an expansion of emergency services. The money proved divisive, which some there said was exactly the point.
“Dominion is an expert at the divide-and-conquer tactic,” Rev. Paul Wilson, the preacher at one of Union Hill’s two historically Black churches and a leading opponent of the pipeline, told NBC News in 2018. “There’s a group of people who are even moving to get me out as pastor. Once you inject money into the conversation, it becomes a wedge.”
When former Vice President Al Gore and anti-poverty activist Rev. William Barber II denounced the compressor station as environmental racism in 2019, Dominion started running Facebook ads featuring video from a high school essay contest on civil rights that it had sponsored.
Meanwhile, the company plowed ahead with plans to build the compressor station ― until a federal court intervened in early 2020, overturning the permit because Dominion had failed to resolve questions about how emissions would affect Union Hill.
It had taken Union Hill activists five years to get redress from the courts.
But a similar fight in a largely white and affluent community played out much differently. Three hours north, in Charles County, Maryland, Dominion spent two years planning another compressor station for the Eastern Market Access project. Then the Mount Vernon Ladies Association intervened, noting that the project would sully the view from President George Washington’s plantation across the Potomac River in Virginia. Four months after the society group joined local environmentalists in opposing the compressor station, Dominion canceled its plans.
It’s difficult to say how Farrell’s personal views have factored into company positions. But critics argue that redevelopment schemes that Farrell supported as a real estate investor, independent of his work at Dominion, have shown a similar disregard for Black history and communities.
In 2017, Farrell led a group of developers pushing a $1.5 billion project to rebuild a 10-block swath of downtown Richmond into a new arena, hotel, offices and luxury apartments. He and his co-investors dubbed the planned development Navy Hill after a Black neighborhood that was razed in the 1960s to make way for highways. That clearance demolished landmarks and displaced more than 1,000 families. This time, Farrell lined up the support of Richmond Mayor Levar Stoney (D), who is Black and has recently expedited the removal of Confederate monuments in response to the new protests against racism. Stoney received $10,000 from Dominion during his first year in office and announced in 2018 that he planned to continue accepting donations from the powerful utility.
While the project’s wealthy backers promised some funding, the city planned to largely finance the redevelopment through bond market debt. The proposal swore off tax hikes. But the need to pay off that bond debt threatened to divert funding from city services for decades to come, risking more budget cuts at a moment when municipal deficits were already triggering increased austerity.
Many also feared the project would gentrify a historically Black area of the city and make the neighborhood unaffordable for its longtime residents.
A November 2019 editorial in the Richmond Free Press, a weekly newspaper serving the city’s Black community, savaged the project. The editorial board called the plan “a travesty” that risked “leaving the taxpayers … stuck with the bill for the rising costs of city services.” Any new municipal revenue from the project would end up going toward paying off the new arena, the newspaper concluded.
“With this latest scheme, our community once again winds up as losers,” the editorial stated. “Only Mr. Farrell and friends are benefiting from this project and the charade being perpetrated to pull it off.”
There was a lot of race-baiting from folks who want to maintain a certain kind of racial capitalism in the former capital of the Confederacy.Chelsea Wise, organizer and host of the Richmond radio show “Race Capitol”
Chelsea Wise, an organizer and host of the Richmond politics radio show “Race Capitol,” said she saw members of her family holding up picket signs supporting the project at a key city council hearing. When she confronted them, they said they’d been offered $25 to show support.
“I like to joke that, after that, Thanksgiving was very different,” Wise said.
But the project was no laughing matter, she said. Wise took to calling the Navy Hill proposal “the second wave of the Bartholomew project,” a reference to the displacement of Black families during the 1960s under city planner Harland Bartholomew.
Among Navy Hill supporters, “there was a lot of race-baiting from folks who want to maintain a certain kind of racial capitalism in the former capital of the Confederacy,” Wise said. “This project would hurt Black people.”
The Richmond Free Press suggested the paltry rate at which Farrell’s group compensated picketers was an insult unto itself. “Sadly, it shows how deep poverty and depression is within Richmond’s African-American community that $25 can get people to show up and hold signs at a City Council meeting,” the editorial read.
In February, the Richmond City Council voted for a resolution that effectively killed the project.
“While the council resolution didn’t name him, the development proposal process did not reflect civic needs so much as the interests of one man in particular: Navy Hill’s leader and Dominion Energy’s chief executive, Tom Farrell, who has been arguing for a new Richmond arena for almost a decade,” Richard Meagher, an associate professor of political science at Randolph-Macon College, wrote in a February op-ed in Style Weekly, Richmond’s alt-weekly newspaper.
Electricity rates are another area where the public interest in Virginia has been increasingly at odds with Farrell’s. In 2007, a hastily passed law proposed and backed by lawmakers who received donations from Dominion restricted the State Corporation Commission’s ability to police the utility rates the company charges. Between 2009 and 2018, the company overcharged Virginians by an average of $234 million per year, according to analysis by the advocacy group Clean Virginia. In 2018 alone, state regulators found that the company overcharged ratepayers by nearly $300 million, which averaged out to an extra $113 per customer for the year.
Dominion also asked to raise the percentage of its revenues it could keep as profit ― a request that regulators rejected last November. Now the company wants to raise rates by as much as $50 a month to help cover the cost of complying with Virginia’s new renewable energy targets.
That would come on top of the financial tsunami ratepayers already face in the months ahead as unemployment in Virginia sits at roughly 10% and workers struggle to make rent amid the coronavirus pandemic. Virginia extended its moratorium on utility service shutoffs for nonpayment until the end of August. Dominion said it will maintain the policy until Oct. 15.
By then, when colder weather risks inflaming the coronavirus infection rate, thousands could lose access to electricity in the state with the seventh-highest average monthly residential electric bill in the country. (Not to mention the other states where Dominion operates. The company said it will apply the same Oct. 15 endpoint to all eight states it serves.)
The risk of losing electricity, advocates say, will fall disproportionately on communities of color. Median-income families in Richmond and Virginia Beach, for example, spent between 3% and 4% of household income on utilities, according to 2013 data from the progressive nonprofit New Virginia Majority. But Black households in the same two cities spent 8% and 10%, respectively. Latino households spent about 6%.
“If you look at what’s actually affordable, paying the current bill plus catching up on arrearage that may have been accumulated during COVID, that may be hard to accommodate,” said Dana Wiggins, director of the Center for Community Outreach and Affordable Clean Energy at the Virginia Poverty Law Center. “When you take into account that they have been overcharged over a long period of time, it makes it very difficult.”
Dominion, meanwhile, increased its dividend to shareholders in February and then paid them an equivalent sum in June.
Had the nearly $3 billion Dominion spent on the Atlantic Coast Pipeline gone instead toward solar and wind projects, it would have likely lowered the cost of Virginia’s effort to transition to 100% clean energy by 2045.
But Farrell has long maintained that fossil fuels are the past and the future. Until early July, Dominion owned an entire gas transmission and storage subsidiary separate from its utility business. “We’ve come a long way in a relatively short time with renewable energy, but we’re still in the age of fossil fuels, whether we like it or not,” Farrell said in a 2015 speech to regional business leaders. “Seventy-five to eighty percent of it is going to come from fossil fuels, as I said, for many decades to come.”
The election of President Donald Trump, a fossil fuel hardliner, only cemented those views. “We need to acknowledge we are an energy superpower and start acting like it,” Farrell said in a July 2017 lecture to the U.S. Chamber of Commerce’s Global Energy Institute. “Instead of trying to keep it all in the ground.”
Thanks to that mindset, Virginia still produces about 63% of its electricity from fossil fuels, compared to 7% from renewables, according to federal figures. The new state rules require that 26% of electricity come from renewables by 2025. In a lone on-the-record statement to HuffPost, a Dominion spokesman said: “We intend to comply with that.”
But climate change’s mounting toll of more disastrous storms, heat waves and flooding show that just meeting that minimum standard is insufficient and “Dominion needs new leadership,” said Harrison Wallace, a community organizer and the Virginia director of Chesapeake Climate Action Network, a regional grassroots environmental group.
“The leadership of our utility monopoly should at least represent the changing tide in politics and how climate is affecting our planet,” he said.
Farrell’s movie may offer the most damning indication that the executive is out of step with the current moment. The $6 million film ― which received $1 million in public funding via a state filmmaking tax credit ― was widely panned for its historical revisionism.
The script for “Field of Lost Shoes,” which Farrell co-wrote, depicts its Confederate heroes at the Virginia Military Institute as deeply conflicted over slavery.
Historian Jeffrey Evan Brooks complained in a review that a “black character named Old Judge, who runs the VMI bakery, is inserted into the story in order to give the cadets a slave with whom to sympathize when he runs into trouble.” In The Hollywood Reporter, critic Frank Scheck said that the movie “doesn’t exactly score points for objectivity.”
“Amazingly, none of the staunch Southerners seem to hold any negative feelings toward blacks,” Scheck wrote.
At one point, a main character suggests as a given that the newly independent Confederacy must abolish slavery after winning the war. Another insists: “This war is not about slavery. It’s about money. It always is.”
For a white person in the Civil War era to express skepticism about slavery, much less outright support for abolition, would “have been an untenable position in Virginia,” said historian Rev. Benjamin Campbell, author of “Richmond’s Unhealed History,” a book about the city’s failure to confront the oppressive racist policies that shaped its past.
“A white person would have been thrown out of the state,” Campbell said. “A newspaper editor who simply questioned slavery was challenged to a duel in 1848 and killed in Virginia.”
Politically acceptable opinions at the time, he said, ranged from full-throated support of slavery to “advocating the American Colonization Society,” which was an effort to deport freed Black people to Africa and establish a U.S. trading colony there.
Campbell said he knows Farrell, who is in his mid-60s, personally and the Dominion boss is “not a rigid racist.”
“He’s a Virginian of his generation, and he’s a person in moral and emotional transition like all the rest of us,” Campbell said. “But it may not be fast enough.”
An internal text message HuffPost obtained showed what appeared to be public relations employees worrying about a “total of three negative pieces brewing” that will “try to tar us,” including this story, an op-ed due out in a local newspaper criticizing a lawmaker for accepting Dominion contributions, and an investigation in another outlet examining the company’s political donations. The texting thread of five Richmond-area numbers, which appears to have accidentally included this reporter, suggested the publications were “brewing all in rough coordination,” though HuffPost had no prior knowledge of the other two pieces.
Farrell’s role should “certainly be questioned” in the wake of the pipeline project, said Barber, a towering figure of the current civil rights movement.
“A company that would attempt to do all this to communities and put its customers through this kind of fight should be challenged in so many ways,” he said. “Racism is not just about symbolism, it’s about substance.”
FOR IMMEDIATE RELEASE
Cassady Craighill, Clean Virginia Communications Director
Dominion and Duke Energy Cancel Atlantic Coast Pipeline
Strong Opposition Across Virginia and Legal Challenges Render Project Unviable
July 5, 2020
Charlottesville, VA — Dominion Energy announced today the cancellation of the Atlantic Coast Pipeline. In response, Clean Virginia Executive Director Brennan Gilmore said:
“Today marks a huge win for Virginia. For years, communities across the Commonwealth have fervently opposed the unnecessary and dangerous Atlantic Coast Pipeline, the most acute manifestation of Dominion Energy’s commitment to putting its financial interests above the health and economic well-being of Virginians. We owe a debt of gratitude to the many Virginians, from community activists to environmental lawyers, who successfully fought this project. We also thank Virginia’s General Assembly, which unanimously passed a law this year that created serious obstacles for Dominion Energy to pass the ballooning cost of the pipeline onto Virginians.”
“As Virginia faces an unprecedented climate crisis and economic uncertainty due to the Covid-19 pandemic, it is more important than ever that our utilities put public service above maximizing profit. The Atlantic Coast Pipeline was never in the best interests of Virginians. That it was allowed to fester as long as it did is evidence of a fundamentally broken utility system that will only be remediated through structural reform. While we welcome the Atlantic Coast Pipeline’s demise, this only marks the end to one symptom of the structural problem of Virginia’s monopoly utilities–the problem itself remains. We must all remain vigilant and continue working towards the creation of a sensical utility system that prioritizes the public interest and prevents projects like the Atlantic Coast Pipeline from ever seeing the light of day.”
Clean Virginia is an independent advocacy organization with an associated Political Action Committee, Clean Virginia Fund. Clean Virginia works to fight corruption in Virginia politics in order to promote clean energy and community control over our energy policy. For more information, visit cleanvirginia.org.
FOR IMMEDIATE RELEASE
Cassady Craighill, Clean Virginia Communications and Advocacy Director
BREAKING: SCC Extends Utility Disconnection Ban Until August Legislative Session
A bipartisan group of nearly 60 lawmakers requested additional data to develop comprehensive legislative response
June 12, 2020
Charlottesville — Today the Virginia State Corporation Commission issued an order extending the current utility disconnection ban until August 31 to “allow time for the General Assembly to meet in special session to address the COVID-19 crisis in a more comprehensive manner.” The SCC also directed utilities to offer up to 12-month extended repayment plans for residential and small-business customers and compelled utilities to submit data on customer arrearages, although the order fell well short of compelling the full range of data legislators requested. In response, Clean Virginia Executive Director Brennan Gilmore said:
“Virginians can rest easier knowing that their power won’t be shut off during the hottest months of the summer. The State Corporation Commission (SCC) heard a conclusive message from over a third of the General Assembly, dozens of advocacy organizations, the Office of the Attorney General, and hundreds of Virginians: ‘no disconnections during an economic and public health crisis.’ Virginian families and businesses should never face electricity shut-offs while Dominion Energy transfers hundreds of millions in overcharges every year from Virginians to its top executives and Wall Street shareholders, including a record-high dividend payout this month.”
“A comprehensive legislative response that treats all parties fairly requires absolute transparency. The SCC should comply with the full extent of the requests from lawmakers and advocacy groups for additional data from utilities regarding earnings, revenues, and access to capital. While the SCC’s order represents progress, it falls short in providing legislators all the information they need to ensure that Virginia consumers and businesses do not bear the brunt of COVID-related hardship while Dominion Energy executives and shareholders enjoy record profits and payouts.”
Several key provisions included in the SCC’s order that will apply during the extended moratorium:
If state regulators were hoping to get clarity from utilities and the public on whether to extend Virginia’s moratorium on service disconnections due to non-payment of bills, they may be sorely disappointed.
Keep the moratorium mandatory? Allow utilities flexibility to impose measures as needed? Get rid of the ban entirely?
Little consensus has emerged from the welter of recommendations put forward by investor-owned utilities, 58 legislators, environmental and consumer protection groups, state electric cooperatives and the Attorney General’s Office as of the June 5 deadline for input set by the State Corporation Commission.
Since March 12, utilities throughout Virginia have not been disconnecting water, electric, sewer or gas service when customers fail to pay their bills in an effort to keep these vital services stable even as the spread of COVID-19 has led to record unemployment levels.
While many utilities voluntarily instituted moratoria on disconnections in the wake of Gov. Ralph Northam’s declaration of emergency, the SCC on March 16 made the ban mandatory. Commissioners later extended their order to remain in force until June 15.
But at the end of May, almost three weeks before the moratorium was set to expire, regulators declared the situation “is not sustainable on an unlimited basis in the absence of programs to ensure that the growing costs of unpaid bills are not unfairly shifted to other customers.”
What to do was a question the SCC put before the public, soliciting input on not only whether the moratorium should be extended or made voluntarily but also what “programs and mechanisms, public or private” should be used “to ensure that the costs of unpaid utility bills are defrayed and will not result in even higher costs on other utility customers.”
Like most policy decisions related to COVID-19, responses have been divided, even among utilities structured along the same lines.
In one camp, encompassing most of the state’s utilities that filed responses, are advocates of a more voluntary approach to disconnections that would give utilities more leeway to craft individual solutions.
Among this group is Dominion Energy, the state’s largest electric utility, which is arguing for the SCC to continue its moratorium on a voluntary basis for four more months, contending that “the proper course of action may not be a ‘one-size-fits-all’ approach,” even as it pledges to keep its own ban in place until Oct. 14.
“The company also supports an extension of the moratorium on a mandatory basis, but recognizes … that a suspension of disconnections can have a disparate impact on utilities based on a number of relevant factors,” the utility wrote in a June 1 filing.
Other utilities were less willing to embrace an extension of the moratorium. Washington Gas Light and Aqua Virginia argued for an end to the ban but expressed openness to the idea of regulators revamping it as a voluntary measure.
“Every utility has the best knowledge of all aspects of its own business operations, including its customer profiles, financial situation and cash flow, as well as billing system capabilities, and is therefore best positioned to voluntarily implement appropriate measures to reduce service disconnections and extend payment options,” wrote Washington Gas Light, which also pointed out the difficulty it could face if the three jurisdictions it serves — Virginia, Maryland and Washington, D.C. — adopt different policies.
Also backing the voluntary path, at least for themselves, are Virginia’s 13 electric cooperatives, a group that has elicited special concern from state regulators because of their greater vulnerability to financial turmoil.
“The Cooperatives simply cannot continue down the current, unsustainable path,” the Virginia, Maryland and Delaware Association of Electric Cooperatives, which is representing the state’s co-ops in the case, wrote in a June 5 filing. Their solution? Replace the mandatory moratorium with voluntary measures for cooperatives, with a “statewide floor of member-consumer protections” instituted as a safeguard.
For at least some of these co-ops, accounts with past due balances have risen sharply over the course of the pandemic. One large co-op has seen 90-day past due accounts rise 216 percent compared to last year. At a small co-op the increase has been a staggering 7,600 percent.
But while investor-owned utilities like Dominion Energy and Appalachian Power have tools like shareholders and greater access to capital that they can bring to bear as the number of unpaid bills rises, cooperatives, as entities owned wholly by their members, face a different situation.
“As member-owned utilities, there are no separate shareholders which could be called upon to bear losses associated with uncollectible debt; all remaining Cooperative ratepayers are and will be affected by these losses,” wrote the association.
Just as vigorous in their arguments are another faction, counting among its members Attorney General Mark Herring’s office and a range of environmental and consumer protection groups, that opposes any lifting of the mandatory moratorium on the grounds that the pandemic and its attendant economic fallout are still ongoing.
“The Centers for Disease Control reports that Virginia has experienced more than 7,500 confirmed cases in the past seven days (ending June 3rd), which is the fifth highest among all states and represents one-sixth of all cases since the crisis began,” wrote Appalachian Voices in a letter to the SCC. “Further, more than 400,000 residents remained unemployed during the week of May 23rd.”
The Attorney General’s office also pointed to the continued state of emergency as proof of the need for the ban to remain in place.
“The existing moratorium should be extended to a point in the future after Virginia’s economy has had an opportunity to resume, allowing impacted citizens an opportunity to regain some financial footing,” wrote Assistant Attorney General Mitch Burton.
Groups varied in how long the moratorium should stay in force. Appalachian Voices threw its support behind Dominion’s four-month extension while also noting that North Carolina has extended its disconnection moratorium through July 29. A group of 11 environmental and consumer groups including the Southern Environmental Law Center and Clean Virginia advocated for the ban to last through “at least the end of the summer cooling season.” A bipartisan collection of 58 state senators and delegates suggested Aug. 31. The Attorney General’s Office provided no specific date.
Finally, in a curious in-between position, Kentucky Utilities, whose Old Dominion Power unit serves about 30,000 Virginians in five southwestern coalfield counties, made no recommendation about when the moratorium should be lifted but emphasized that it should not be made voluntary.
“Voluntary measures,” the company contended, “could lead to different treatment of similarly situated customers.”
Further complicating the debate is the contention by a number of groups that the SCC’s concern that unpaid bills from the pandemic will result in cost-shifting to other customers may be misplaced.
“There are not enough facts currently in the record to know with any degree of certainty the revenue impact that may (if at all) be associated with the COVID-19 emergency and unpaid utility bills,” said Burton of the Attorney General’s Office. “Without having evidence in the record as to a reasonable estimate of COVID-19’s impact on utility revenues, it is impossible to say what would or could constitute sufficient funding to defray any such revenue reductions.”
The lack of hard data was also raised by other participants — most notably, the bipartisan group of 58 state senators and delegates who are asking the moratorium to remain in place until Aug. 31, with the expectation that the General Assembly will address the coronavirus crisis in a special session.
“Consideration of potential legislative options is hindered, however, by insufficient data on the extent of the problem,” the legislators wrote before asking the SCC to require all utilities to provide a slate of data, including current arrearage balances and historic averages, utility revenue and earnings history and debt service reserves.
Furthermore, many of these groups contended, lifting the moratorium is not the only way to defray ratepayer costs.
Under state law, no rate increase can occur unless approved by the SCC during a formal rate review, pointed out the 11-member environmental group represented by the Southern Environmental Law Center.
“The potential cost shift to ‘paying customers’ will only come – if it comes at all – in a future general rate case. There, the Commission will evaluate the totality of evidence to determine whether a rate increase is justified, and that evidence will include far more than the revenues lost during the moratorium,” the group argued.
Three alternative paths were put forward by the Attorney General’s Office. One, the application by smaller utilities for federal relief funds, has already been adopted by four of Virginia’s electric cooperatives.
Citing among other factors the need to mitigate the moratorium’s financial impact, these co-ops have been awarded loans through the Paycheck Protection Program established by the federal CARES Act, with BARC Electric Cooperative netting about $1.1 million, Northern Neck Electric Cooperative $1.2 million, Central Virginia Electric Cooperative $2.5 million and Shenandoah Valley Electric Cooperative just shy of $4 million.
Larger utilities, wrote Burton, could seek emergency rate reductions for “customers of any utility for which there is evidence of excessive revenues” — the latter an apparent allusion to Dominion Energy, which the SCC has repeatedly reported is overearning by hundreds of millions of dollars — or “it is possible that utility management could simply share the financial burden with shareholders, as other businesses impacted by the pandemic have had to do.”
While the SCC has not set a date for its decision, the current moratorium is set to expire June 15.
FOR IMMEDIATE RELEASE
Cassady Craighill, Clean Virginia Communications Director
SCC Must Extend Moratorium on Utility Disconnections; Legislative Action Next Step
Environmental groups unite behind call for extension and data release from utilities
June 5, 2020
Charlottesville — Eleven environmental and marginalized community advocacy organizations today joined statewide calls for the Virginia State Corporation Commission (SCC) to extend its moratorium on utility disconnections during the COVID-19 pandemic. A joint comment submitted by the organizations questions the SCC’s assumption that a moratorium extension will harm ratepayers given the lack of available and relevant data from regulated public utilities including how many Virginia customers have unpaid utility bills, the reserves of each utility, and the amount utilities have overcharged customers in previous years.
The comment includes:
Virginia’s largest electricity provider Dominion Energy has declined to comment on how many residential and non-residential customers have unpaid bills or were disconnected in the current year. Dominion has overcharged its customers by $1.3 billion since 2015.
The SCC’s state order suspending disconnections is set to expire on June 15, 2020. Chesapeake Climate Action Network, Clean Virginia, Climate Action Alliance of the Valley, League of Conservation Voters Virginia, New Virginia Majority, Piedmont Environmental Council, Rappahannock League for Environmental Protection, Sierra Club Virginia Chapter, Southern Environmental Law Center, Virginia Conservation Network, and Virginia Interfaith Center for Public Policy signed the joint comment to the SCC, due today.
Quotes From Participating Organizations:
Harrison Wallace, Chesapeake Climate Action Network – Virginia Director
“It’s the SCC’s job to protect consumers, not corporations. But Dominion is planning to give their shareholders fat dividends during a time of economic turmoil and also planning to give out targeted grants in the name of justice. If they can do that, they can help struggling families keep the lights on and cool their homes during the hottest season of the year.”
Brennan Gilmore, Clean Virginia – Executive Director
“Families should not face electricity disconnection while Dominion Energy unjustly transfers hundreds of millions in overcharges every year from Virginians to its top executives and shareholders. The State Corporation Commission should provide relief to struggling Virginia families and small businesses by extending the moratorium on utility disconnections and demanding transparency from utilities to better understand the scope of the problem.”
Jo Anne St. Clair, Climate Action Alliance of the Valley – Chair
“The Climate Action Alliance of the Valley believes that the SCC must be mindful that calamities like the current pandemic, and like the consequences of our ongoing climate crisis, usually burden those who are least able to adapt and recover quickly. The pandemic is not over; its negative economic effects will be with us all, especially the many Virginians who chronically have a serious burden meeting their utility bills. The SCC must consider this reality.”
Michael Town, League of Conservation Voters Virginia – Executive Director
“We should not be debating whether or not to extend a moratorium on utility shut-offs in the midst of a global pandemic and economic depression that is especially devastating for low-income neighborhoods and communities of color,” said Michael Town, executive director of the Virginia League of Conservation Voters. “The moratorium should remain in place until the pandemic is over and Virginia is able to implement just and fair utility reform to ensure our most vulnerable citizens are never put in this position again.”
Kenneth Gilliam, New Virginia Majority – Policy Director
“We are very much still in the midst of the COVID-19 pandemic, which has had greater economic and health effects, likely to be long-lasting, on low-income households and Latinx and Black communities in Virginia. The economic repercussions of the crisis are not equally distributed by race or income across the state; however, measures, such as the moratorium on utility disconnections, provides much needed fiscal relief to low-income customers who generally pay more for energy and are predicted to have greater loss of income throughout the rest of 2020, and well into 2021.”
Kate Addleson, Sierra Club Virginia Chapter – Director
“The COVID 19 pandemic has thrown Virginia into a serious economic downturn with many families across the commonwealth facing job loss and financial strain. With Virginia’s hottest months still ahead of us, the SCC must extend the moratorium on utility shut-offs at least through the summer to ensure families and businesses aren’t subject to life-threatening heat. The commission should take steps to offer utility bill assistance and extended repayment programs during this difficult time.”
Will Cleveland, Southern Environmental Law Center – Senior Attorney
“With the summer heat bearing down on us, we must do all we can to help people who, as a result of this pandemic, struggle to pay their utility bills. Expanded utility-sponsored energy efficiency programs, bill assistance and payment plans, and data collection are necessary to help all Virginians come through this difficult time.”
FOR IMMEDIATE RELEASE
Cassady Craighill, Clean Virginia Communications Director
Dominion Energy’s costly new energy blueprint fails to meet challenge of Virginia’s clean energy transition
Clean Virginia: Plan approval should depend on full rate case review of Dominion’s spending
Richmond, VA — Dominion Energy released its latest Integrated Resources Plan (IRP) today, projecting significant rate increases and an increased reliance on short-term fracked gas, despite the monopoly’s recent public commitments to clean energy.
“After decades of delays and resistance, Dominion has been forced by recent law to move forward on clean energy. The new Integrated Resource Plan appears after an initial review to be a flawed and imperfect reflection of the clean energy directive from the Governor, General Assembly, and citizens of the Commonwealth,” said Clean Virginia Executive Director Brennan Gilmore.
The utility monopoly filed its latest IRP to account for the Virginia Clean Economy Act (VCEA), which Governor Ralph Northam signed into law last month. Primary findings from the plan include:
“Dominion is proposing a substantial overhaul of the way electricity is generated, consumed, and stored, all of which will have a significant economic impact for Virginian families and businesses,” Gilmore said. “The new construction envisioned by its IRP will generate significant shareholder profit for Dominion, but major rate increases for customers. However, the utility monopoly has aggressively opposed any attempt at a transparent review of its rates, despite overcharging Virginians by $1.3 billion since 2015. Dominion’s continued unwarranted reliance on fossil fuels and evasion of a fair review of rates — particularly at a time of unprecedented hardship — is deeply irresponsible. The General Assembly should urgently mandate regulators to conduct a full, transparent review of Dominion’s current rate structure in light of its massive spending plans.”
Utilities, regulators and advocates around the country are exploring new business models from updated rate structures to performance-based regulation. Learn more in our editorial report.
Dominion specifically highlights the need for AMI and other self-healing grid elements that were rejected in March by pointing to the newly-approved Virginia Clean Economy Act (VCEA), which set a 100% clean energy goal for the state by 2045.
In the petition, Dominion said the SCC’s justification to deny several elements of its grid modernization plan, including AMI, were “not reasonable and prudent,” especially given legislative goals set by the VCEA.
But opponents continue to raise familiar objections to the company’s plans.
“Dominion Energy is grasping at straws with this petition and trying to avoid an advanced metering infrastructure program that has quantifiable benefit to customers,” Cassady Craighill, spokesperson for Clean Virginia, told Utility Dive. Clean Virginia was one of many advocacy groups that supported the passage of the VCEA.
Dominion did not respond to a request for comment from Utility Dive by publication time.
“The commission will not entertain responses to, or requests for oral argument on, a petition,” Ken Schrad, SCC spokesperson, told Utility Dive.
For other parties to officially respond to Dominion’s attempt to SCC can issue an order scheduling more pleadings or an order to directly address Dominion’s petition for reconsideration, but the commission is not bound to a time frame to respond with their action, according to Schrad.
“If the company was sincerely interested in energy efficiency, then it would have followed the State Corporation Commission’s instructions to improve its program. It’s clear that Dominion is more interested in keeping its hundreds of millions in overcharges than saving energy or saving customers money,” Craighill said, referring to concerns with customer refunds.
When Virginia’s legislature passed House Bill 528 in March, the SCC gained oversight of cost recovery for early power plant retirements. Clean Virginia alleged that Dominion could force ratepayers to pay for a large part of the clean energy transition and use such expenses to deny customer refunds stemming from canceled programs or the early retirement of fossil generation. But denying customer refunds to programs would become harder under HB 528.