By Kimberly Pierceall
State regulators have shot down a Dominion Energy request for a higher profit rate.
The State Corporation Commission said Thursday it had denied Dominion’s proposal to collect a 10.75% rate of return on equity, keeping it at 9.2%.
Regulators said the higher rate could have cost Dominion customers an extra $1.4 billion over 25 years.
“We look forward to continuing our work to make our home state a national leader in clean, affordable, reliable energy,” said company spokesman Rayhan Daudani, reiterating that the decision confirmed its existing rate of return on equity.
Return on equity rates are set by regulators to ensure a monopoly utility in a certain geographic area can provide reasonable service to customers but also attract those interested in investing or lending it money to fund projects and expansion plans.
Dominion has proposed $12 billion worth of capital expenses, including its off-shore wind project, that are pending commission approval.
The return on equity rate is essentially what Dominion Energy is allowed to earn in profit. Regulators said the utility’s proposal of 10.75% was not reasonable, consistent with the public interest or representative of the “actual cost of equity in the marketplace.” The lower rate, though, “reasonably balances the interests of (Dominion), its customers, and its investors,” according to a statement from the state agency.
“Dominion’s customers won today, thanks to a broad swath of Virginians who opposed the utility monopoly’s request,” said Brennan Gilmore, executive director of Clean Virginia, an advocacy group that has contributed to elected officials who have pledged not to accept Dominion Energy donations. “These voices included hundreds of Dominion’s customers, low-income advocacy groups, large retailers like Walmart, the Office of the Attorney General, the U.S. Navy and nearly 40 members of the General Assembly.”
In his statement, Gilmore also urged action in the upcoming legislative session to lower utility bills. “The truth is that Dominion and its investors already enjoy an actual return on equity far higher than its approved rate, banking $1.3 billion in overcharges since 2015. Without legislative intervention, it will continue to overcharge customers by hundreds of millions of dollars every year, lining the pockets of its shareholders and executives at the expense of Virginians.”