The 2018 Utility Regulation Fight

Since the General Assembly passed the 2015 "rate freeze" bill, Dominion Energy has overcharged consumers upwards of an estimated $1 billion. We urged Virginia's representatives to adopt legislation that would repeal the 2015 rate freeze, refund consumers 100% of what we are owed, and promote jobs in renewable energy. Senate Bill 966, which Governor Ralph Northam signed into law on March 9th, falls short of these standards. Read more below to learn about the 2018 utility bill.


“This (bill) could potentially result in billions of dollars of additional costs that must be borne by customers in higher rates.” - State Corporation Commission

“The proposal is the equivalent of a tax increase...[to] enlarge the profits of private companies. It will take money out of the pockets of Virginia families and businesses and put it in the pockets of Appalachian Electric Power and Dominion Energy.” - Sen. David Suetterlein

“We’re concerned that the bill as written opens the door to effectively charging consumers twice for the same investment.” - Office of AG Mark Herring

“We believe it will be worse than the current rate freeze, there’s simply no need to overcharge customers for important and critical infrastructure.” - Ed Petrini, Consumer Protection Lawyer for Dominion customers

ON MONDAY, FEBRUARY 12, the VIRGINIA HOUSE OF DELEGATES passed HOUSE BILL 1558. While dominion energy launched a propaganda campaign to hide the true effects of this bill, it is unquestionablY a bad idea for virginians. The Attorney General’s office and the STATE CORPORATION COMMISSION have  concluded that the bill DOES NOT PROTECT CONSUMERS AND could cost ratepayers billions of dollars more.

This is why:

This bill and its Senate counterpart would allow Dominion to spend $20,000 per customer with zero review and accountability. This amounts to $50 BILLION of spending without meaningful oversight from the State Corporation Commission:

●      These bills would remove SCC authority over how Dominion spends at least $50 billion on undergrounding projects. Dominion is guaranteed a monopoly over Virginian customers. In exchange they are subjected to oversight to make sure they play fair, since they are guaranteed no competition in the marketplace. This bill would remove that oversight.

●      They remove virtually all SCC authority over these projects by legislating that the projects are “reasonable and prudent” and “in the public interest.”

●      While there are some limitations on how these investments are made, the amount of ratepayer money that can be spent on the projects essentially has no limit.


These bills would allow Dominion to “double dip,” charging customers TWICE, plus 10% profit, for the same infrastructure project

●      Dominion would have the power to take money it has overcharged customers and “reinvest” it in large infrastructure projects instead of issuing refunds. Every ratepayer dollar in overcharges Dominion “reinvests” can be added to its “rate base” going forward (this is the double-charge)

●      For every dollar invested in the rate base, the company receives a guaranteed Return on Equity (ROE). The last ROE set by the SCC was around 10%.

●      This effectively allows Dominion to charge ratepayers DOUBLE for the same project, plus an additional 10%. There is no legitimate business operating in a competitive market that enjoys this type of guaranteed return, yet Dominion gets it on the backs of Virginian bill payers.


These bills would further erode the SCC’s authority to regulate state-sponsored utility monopolies.

●      The customer “offset and reinvestment” mechanism would allow Dominion to keep rates artificially high, effectively preventing the SCC from reducing base rates. The bills Dominion sends to customers are already the 10th highest in the nation.

●      These bills reduce the frequency of SCC rate reviews (triennial instead of biennial).


These bills would short-change customers who are owed refunds

●      While Dominion is touting short-term relief for its customers, Dominion has proposed refunding just $200 million of its over-charges, which the SCC estimates to total at a minimum $426 million in 2015-2016. That is just two years, but the overcharges continue today, and the SCC estimates the total overcharges after 2015 to be $1 billion.

●      The exact amount to be refunded should be determined by an SCC audit in a rate case, not by Dominion in legislation they wrote and passed with legislators they have bought off.

●      Dominion claims customer bills will decrease $5-6/month immediately, but this is largely due to a change in the federal tax code. The company would have been required to pass those savings back to customers anyway.


Renewable energy, energy efficiency, and grid modernization are important but separate issues from the “rate freeze.” Combining these issues into one bill is a tactic that only serves Dominion’s goal of greenwashing and advancing the bill. If the goal is to end the “rate freeze,” then these bills should simply restore SCC authority to regulate monopoly utility rates.  

HB 1558 would NOT guarantee investments in renewable energy or energy efficiency.

●      While Dominion claims this bill will lead to significant investments in clean energy, nothing in the bill requires those investments. Instead it allows Dominion to determine how ratepayers’ money is spent and removes independent oversight by the SCC.

●      Investments in grid modernization are essential to drive efficiency and keep electricity affordable, reliable and secure in the commonwealth. However, this bill fails to ensure the investments made will be those most beneficial to customers.

●      The definition of grid modernization in this bill is overly broad and would allow Dominion to choose investments like power line undergrounding with little oversight, while earning its generous guaranteed Return on Investment.

●      Other states have engaged in multi-year reform projects to update their outdated electricity regulatory process. Any sensible legislative process should consider the full impacts to consumers before codifying an ambitious new energy policy.


Read more about the bill at:

Washington Post

Appalachian Voices

Richmond Times

Blue Virginia