WASHINGTON — Virginia power companies would continue to rake in millions of dollars more than they would have been allowed before a 2015 rate freeze if a pair of new bills backed by Dominion Energy are approved by the General Assembly, a State Corporation Commission analysis finds.
At the time the 2015 law was passed, Dominion said it would provide certainty for rate payers regardless of any additional federal environmental protection rules. The law blocked the State Corporation Commission from adjusting rates, even if there were excessive profits.
The new Dominion-backed proposals would reinstitute some reviews every three years, under different rules.
The State Corporation Commission analysis of the new proposals concludes that the Senate bills as initially written would extend the current rate freeze and limit what rate payers can get in refunds. The analysis was completed in response to a request by Fairfax Democratic Sen. Chap Petersen, who has quixotically railed against the 2015 rate freeze.
Dominion and Appalachian Power would also be permitted to add charges to bills for new power lines and other facilities while also getting credit for spending other money on the projects. The analysis concludes customers could effectively be forced to double pay for some projects.
The analysis recognizes that customers would get refunds totaling $133 million under the bill, which are meant to represent over-payments from 2015 and 2016 alone. Additional base rate reductions would be permitted no earlier than 2025.
Rates would not be allowed to be reduced if Dominion spends more on certain major capital projects over a six-year period than would be due to customers in refunds.
Dominion would continue to be allowed to keep 30 percent of earnings above what the State Corporation Commission determines to be a fair rate of return.
The analysis also questioned certain effective dates of rate cuts tied to the recent federal tax cuts, since the rate cuts for customers would kick in after Dominion had begun to reap the benefits.
In an email, Dominion’s David Botkins said the company would support an amendment to make the tax savings for customers effective Jan. 1, 2018.
Under the bills, the State Corporation Commission expressed concern it would lose some regulatory authority to force lower-cost solar or wind projects. The bills also provide for additional customer payments for undergrounding power lines, including some projects the State Corporation Commission has blocked before.
“This report analyzes a work in progress, and subject to change,” Botkins said. “We continue to believe a reinvestment model that transforms our energy grid and significantly increases the amount of renewable energy we produce is sound policy for Virginia.”
Separate bills sponsored by Petersen and Sen. Steve Newman of Lynchburg would provide for more frequent rate reviews and possibly different refunds for rates paid since 2015.
While those bills are still alive, a bill sponsored by Petersen and Republican Sen. Dave Suetterlein of Roanoke County that aimed to completely repeal the rate freeze was rejected by a 13-1 committee vote Jan. 15.
Dominion is regularly the largest corporate campaign donor to Virginia lawmakers.
