Dive Brief:
- A Dominion-backed piece of legislation before the Virginia legislature is getting a makeover after the original bill drew criticism for insulating the utility from rate review and allowing it to make grid investments without approval.
- Lawmakers are struggling with how to repeal a 2015 rate freeze that may have allowed Dominion to overcharge by more than $425 million last year, according to the Richmond Times-Dispatch.
- However, Dominion's proposed legislation came under fire for going even further in protecting the utility and after the State Corporation Commission weighed in to say it would shield the utility from review and ratepayers would be overcharged. Washington Post reports that Gov. Ralph Northam (D) also stepped in to hash out a deal with a separate group of stakeholders, but no details were given.
Dive Insight:
A bill replacing Dominion's proposal passed a House Commerce and Labor subcommittee yesterday, according to The Roanoke Times. Authored by Del. Terry Kilgore (R), the measure would increase a customer rebate from $133 million to $175 million, ensure regulators must approve grid modernization spending and give the State Corporation Commission authority to review the utility's rates and authorize refunds.
Under the original bill, any money Dominion spent on grid modernization could be netted against any money ratepayers were due. And the projects, without a review from the SCC, would go into the utility's ratebase.
But a report from the SCC detailed the bill's possible impacts, which would “cancel out refunds otherwise due to customers,” it said.
“Rates cannot be reduced if utility spending on these projects during this period is greater than customer refunds that would otherwise result from overearnings,” the report noted. “Further, it keeps existing provisions in law allowing the electric utilities to keep 30 percent of overrearnings.”
The Sierra Club said the bill would make it impossible to ensure rates were fair.
Kate Addleson, director of the Sierra Club Virginia chapter, said in a statement that the bill "would allow monopoly utility Dominion Energy Virginia to effectively regulate itself."
Dominion secured the rate freeze in 2015 amid concerns the Clean Power Plan would cause utility rates to rise quickly. The Trump Administration has since repealed the rule, and is currently crafting a replacement. The utility's rate freeze has faced challenges. In 2017, the Virginia Supreme Court upheld the law in a 6-1 decision, after being challenged by the Old Dominion Committee for Fair Utility Rates and the Virginia Committee for Fair Utility Rates.
