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| EXCUSE ME PLEASE BUT DOESN'T THE GUY IN THE MIDDLE LOOK LIKE GOVERNOR RALPH NORTHAM? |
dominion power is the real power in Virginia politics, buying and controlling politicians in the Virginia Senate and House of Delegates, money transactions that are acceptable in the U.S. as campaign contributions but realistically are financial transactions between perp and prostitute and are what we hypocritically refer to as corruption in all other countries. Click here to find your delegate and senator in Richmond and e mail them demanding they deny dominion power the double dip. The legislature in Richmond is supposed to vote on the final version of this legislation on Monday, 26 FEB 18
Pending Va. law will affect utility bills for a decade. Here’s what you need to know.
By Gregory S. Schneider February 21 Email the author
One of the most sweeping pieces of legislation before this year’s General Assembly involves the state’s regulation of its monopoly electric utilities - Dominion Energy, which services some two-thirds of the state, and Appalachian Power Co., which services customers in the Southwestern part of Virginia.
Traditionally, the utilities were overseen by the State Corporation Commission, a three-judge panel elected by the General Assembly. The SCC would review utility rates every two years and decide if the companies had overcharged consumers. The SCC could require the utilities to lower rates and issue refunds to ratepayers - though the companies still got to keep 30 percent of their excess revenue.
In 2015, though, Dominion and the General Assembly decided the utilities needed protection from the uncertainty of the Obama administration’s Clean Power Plan, which tightened environmental requirements. So the legislature passed a law, with bipartisan support, that froze base electric rates for seven years and prevented the SCC from conducting its biennial reviews. It was signed by Gov. Terry McAuliffe (D).
The rate freeze became a
political issue in 2017, when it became clear the new Trump administration would kill the Clean Power Plan. What’s more, the SCC had conducted a review that found the utilities had earned hundreds of millions in excess profits during the freeze.
Opponents criticized Dominion’s great influence in Richmond, where it is the state’s largest corporate political donor. More than a dozen Democrats who pledged not to accept donations from Dominion won election to the House of Delegates.
When the General Assembly convened in January for its 2018 session, lawmakers worked with Dominion to create legislation that would enact a sweeping overhaul of utility regulation. Nearly identical versions have passed both the House and Senate and are now working their way through committees. Here are the key consumer impacts of the bills:
Money back to ratepayers
Dominion customers would likely see their average monthly bill decrease by $6 under the plan. That’s mostly thanks to the following components:
* A $200 million credit to consumers for excess money the utility earned during the freeze. (The SCC has estimated that Dominion actually earned somewhere between $300 million and $700 million in excess profits during just two years of the freeze).
* Rate reductions of about $125 million per year based on the company’s savings from the corporate tax cuts enacted by Congress. This amount will be firmed once the tax code’s full impact is clear; it could change.
* Elimination of a $25 million annual surcharge that Dominion has been levying to cover the cost of biomass-burning facilities.
State oversight
The SCC would resume its oversight of the utilities, but it would conduct reviews every three years instead of every two years.
The SCC’s next review of Dominion rates would come in 2021 and would look at the years 2017-2020.
But customer refunds and base rate reductions are highly unlikely under the legislation, because of the next category:
Incentives for Dominion
Dominion would be allowed to reinvest any excess profits in modernizing the grid or renewable energy, such as solar and wind, instead of paying rebates to customers or reducing rates.
At the same time, the law would state that making those investments are “in the public interest,” basically telling the SCC that they have priority over keeping rates low.
To double-dip, or not to double-dip?
The mystery at the heart of the legislation has been whether it would let Dominion keep your cash and spend it too. In the Senate version of the bill (SB966), Dominion could both use excess profits for new projects and build the cost of those projects into base rates. An SCC analyst said that for consumers, it’s the equivalent of being given a new car as payment for a debt, then having to take over the payments on the car. Dominion denies that the bill works this way.
In the House version (HB1558), language was added at the last minute that prohibits Dominion from putting those investments into base rates. On Tuesday, a House committee amended the Senate bill to incorporate that change. Dominion now says it supports the new version.
Other goodies
Dominion would boost its EnergyShare program and run it through 2028, providing bill payment and weatherization assistance for customers who are low-income, elderly, disabled or veterans.
The bills also push the SCC to allow Dominion to undertake expensive projects to put utility lines underground. The commission often balks at these projects as not cost-effective, and warned in an analysis of the legislation that it “could potentially result in billions of dollars of additional costs that must be borne by customers in higher rates.” Supporters argue that it will improve the overall effectiveness of the grid and reduce outages.
Large industrial ratepayers would get a 2 percent reduction if they sign an “exclusive supply agreement” with Dominion of at least three years.
Competing bottom lines
Supporters say the legislation would give Dominion (and Appalachian) steady funds to modernize the grid - to make it less vulnerable to both cyberattack and natural disasters - and to convert to renewable energy such as wind and solar. Many environmental groups now either support the deal or are neutral.
Critics - including the consumer protection office of the state Attorney General - say it prevents a realistic chance of rate reductions for some 10 years and guts the SCC’s ability to regulate the state’s biggest monopolies. The alternative would be to simply undo the 2015 rate freeze and let the SCC review all those projects - wind, solar, underground lines - individually.
Wall Street has already weighed in. It likes the proposed legislation. Analysts have boosted their outlook for Dominion stock in anticipation of the law passing and being signed by Gov. Ralph Northam (D), who
helped negotiate it.
Greg Schneider covers Virginia from the Richmond bureau. He was The Washington Post's business editor for more than seven years, and before that served stints as deputy business editor, national security editor and technology editor. He has also been a reporter for The Post covering aviation security, the auto industry and the defense industry.
An earthquake shook Richmond, Virginia on the afternoon of Monday, February 12, rocking the House of Delegates just as it was supposed to be passing
HB 1558, Dominion Energy’s Ratepayer Rip-Off Act of 2018. The bill was intended to help the utility lock in stupendous unearned profits for its parent company, courtesy of the monopoly’s captive customers, under the guise of supporting clean energy and grid investments.
And the bill did pass the House, but only after delegates adopted an amendment offered by Minority Leader David Toscano stripping away a lucrative provision that Dominion both desperately wanted and swore didn’t exist: the infamous “double dip” that the SCC has said would allow Dominion to charge customers more than twice over for a large portfolio of infrastructure projects. With billions of dollars worth of projects on the drawing board, the double dip meant serious money.
Anyone who didn’t believe the double dip was real only needed to listen to Dominion lobbyist Jack Rust respond to repeated questions about it during a Senate Commerce and Labor Committee hearing two weeks earlier. It was a “yes or no” question that Rust wouldn’t answer with a yes or a no.
Obfuscation, however, was good enough for the Senate, which passed
SB 966 last week by a bi-partisan vote of 26-13. It was good enough for Governor Northam, too, who had already pledged to sign the bill. A few environmental groups broke ranks to support the bill, too, cheering the provisions for energy efficiency and the promise of more renewables.
Admittedly, the Attorney General’s Office of Consumer Counsel remained opposed. So did other environmental and consumer groups, complaining not just about the double dip, but about ceding control over the future of Virginia’s electric grid to a profit-driven monopoly. But when has the General Assembly ever cared what environmental and consumer groups thought? So passing the bill through the House should have been easy.
And then Toscano called Dominion’s bluff. If the double dip is real, said Toscano, his amendment would fix it. If the bill doesn’t already allow for double-dipping, then making doubly sure of that does no harm.
The logic was unassailable, though bill patron and Friend of Dominion Terry Kilgore assailed it anyway. As the Associated Press
reported, Kilgore tried to persuade legislators to reject Toscano’s amendment. Yet even some fellow Republicans deserted him on the vote, helping Democrats pass it 55-41. A quick-thinking Delegate Habeeb, apparently recognizing bad optics for the Republicans, called for a second vote, and this time the amendment passed 96-1, with even Kilgore supporting it.
By all accounts, the vote was unprecedented. Dominion does not lose floor votes. The vote rocked the House.
In hindsight, perhaps Dominion should have known a fault line had formed. Grassroots groups were agitating against the power of monopoly. A new group called
Clean Virginia was agitating against the bill. Almost all the freshmen Democrats had pledged not to accept Dominion money—and there were a lot of them, thanks to last fall’s “blue wave” election. But the Republicans had already scuttled most of their bills; surely they had learned humility? They had not. They all supported Toscano’s amendment, and all but one followed him in opposing final passage of the bill, which passed 63-35.
The earthquake could be felt over at Dominion headquarters, where reporters could be seen inspecting the foundation for damage. CEO Tom Farrell called in his damage control specialists, heavy-hitting lobbyists Eva Teig Hardy and Bill Thomas, to persuade legislators to support the Senate version of the bill over the House version—or failing that, to lard it up with new favors to the utilities.
According to the AP, Kilgore continued to maintain after the vote that the double dip was “more perception than reality.” But he also said, “Toscano’s amendment takes ‘a lot of stuff out that needs to stay in’ the legislation. ‘I’m going to have to fix it.’”
One might think Dominion and its allies would be embarrassed to defend a provision they say doesn’t exist. Reportedly they have pivoted to a different argument, that the company would have no incentive to invest in renewable energy if it isn’t allowed to rip off ratepayers in the process. Accordingly, they are holding solar investments hostage, knowing how much Democrats want them.
Dominion’s new argument is simply posturing. Its 2017 Integrated Resource Plan declared solar to be the cheapest form of energy in Virginia, and it had signaled via the Rubin Group its plan to build at least 3,000 MW of solar in the coming years. Saying now that it might take its ball and go home is a sign its lobbyists are out of good arguments.
In the past, good arguments were not a requirement for Dominion to get what it wants; political power has always been enough. It will be interesting to see now whether Dominion emerges with some semblance of its omnipotence intact, or whether this earthquake presages new shocks that could crack the fortress.
