- The Virginia Senate passed a bipartisan House bill 35-5 on Thursday, giving state regulators control of cost recovery over power plant retirements, despite opposition from Dominion Energy.
- The bill would require the Virginia State Corporation Commission to determine the length of time that a utility can recover "any appropriate costs" from retiring coal and gas generation early. The measure undoes a former provision that gave Dominion the flexibility to skirt refunds on coal and natural gas plants retired early.
- The bill is seen as a key example of the Democrat-led legislature standing up to Dominion, despite nearly a decade of successful lobbying from the utility. However, Dominion saw many wins as the legislative session winds down, including the advancement of bills that would guarantee utility cost recovery of offshore wind development.
As the largest investor-owned utility in the state, Dominion has opposed several bills aimed at electric utilities, including a bipartisan effort to deregulate retail markets, ending Dominion's monopoly.
HB 528 would allow a neutral third party to manage the cost of retiring coal plants by establishing a recovery period that "best serves ratepayers," according to the bill, introduced by Del. Suhas Subramanyam, D. The utility fought hard against this measure, according to advocates for the bill.
Under the current law, Dominion is allowed to recover as a one-time expense the remaining balance of retired units, without refunding the overearning to customers, Subramanyam said.
"Today is the first time that a bill that Dominion has opposed has made it out of the Senate in at least a decade," Cassady Craighill, spokesperson for Clean Virginia, told Utility Dive. "It's really hard to overstate how dominant Dominion has been for so long. These legislators have been taking a lot of money from Dominion."
A representative of Dominion declined to comment.
The change is largely thanks to a new class of delegates, Craighill said, following the state's November elections, establishing "an appetite to pass something really big like energy reform."
"This bill would have never passed in previous years, because of the opposition from regulated utilities," the bill's sponsor, Subramanyam, said in a statement.
The Virginia Senate initially voted 27-13 on HB 528 on Wednesday before legislators quickly voted to reconsider, facing pressure from five Dominion lobbyists outside the Senate chamber to delay a final decision, according to the Associated Press.
The bill is on its way to the governor's desk after the House accepted the Senate's amendments on a 50-43 vote.
Last month, the House voted to extend consideration of HB 1677 to 2021, giving legislators a year to consider ending Dominion's monopoly on electric generation.
Supporters of the bill see this as a win, adding that the utility has previously been able to stymie deregulatory efforts. The extra year can be an advantage to a growing coalition of supporters for the bill, Craighill said. Clean Virginia is one of the original members of the Virginia Energy Reform Coalition established in 2019.
However, the end of the legislative session still brings a number of wins to the investor-owned utility.
A split Senate committee killed a House bill that would have impacted Dominion's base rates by making electric utilities comply with a stricter standard of rate review in the state starting in 2021. The Senate and House have also advanced bills that ensure rate recovery for offshore wind projects, reducing uncertainty for the utility's developer subsidiary.
With utility-positive outcomes dominating the legislative sessions, some analysts are noting the efforts against Dominion's lobbying have faltered in many cases.
"We've seen several media reports about politicians pushing for deregulation or aggressively reducing reliance on natural gas, concerns about [Dominion's Integrated Resource Plan] over-forecasting load growth to justify over-building capacity, and efforts to limit campaign contributions. However, most of this seems like grandstanding without merit to us," Andrew Weisel, analyst at Scotia Howard Weil, said in February, reporting on Dominion's fourth quarter earnings call.