Senators voted 32-6 on Friday in favor of legislation that would prevent the State Corporation Commission from reviewing the company’s rates for five years and would freeze Dominion’s base rates during that period of time.
image | Dominion Virginia Power
Dominion and other supporters for Senate Bill 1349 said it would help the company deal with the costs of complying with the U.S. Environmental Protection Agency’s Clean Power Plan, which requires states to cut carbon emissions by 2030.
Company officials said the plan could require closure of some power plants in Virginia. They said SB 1349 would make their shareholders, not customers, bear the costs of closing a plant during the rate freeze.
The bill was sponsored by Sen. Frank Wagner, R-Virginia. All but one Republican senator and most Democratic senators voted for it.
“I believe this is the best option for Virginia families as well as the long-term interest of the Commonwealth,” Minority Leader Dick Saslaw of Springfield said in his weekly newsletter. “I believe this bill will help us to maintain our affordable energy advantage.”
Sen. Chap Petersen, D-Fairfax, was one of the six senators who voted against SB 1349. In a blog post after the vote, he voiced concerns about the bill.
“The bill was premised on the promise by Dominion Power to ‘freeze its base rate’ for the five years as it’s negotiating a ‘transition period’ in the electric industry. Sounds great but that promise ignores several facts, including the fact that the current base rate has ALREADY caused ‘excessive earnings’ as determined by Virginia’s State Corporation Commission,” Petersen wrote.
“If this bill becomes law, these ‘excessive’ earnings will continue through 2019 without any requirement of refund. In addition, fuel price fluctuations can drive prices higher.”
Glen Besa, director of the Virginia chapter of the Sierra Club, also expressed opposition to the bill.
image | Sierra Club
“The problem is that implementation of the Clean Power Plan may actually save us money on our bills if the state does it right and compels Dominion to invest in energy efficiency,” Besa said in an op-ed column published Saturday in the Richmond Times-Dispatch.
“Cutting energy waste, after all, saves money. Ordinarily, ratepayers would see the benefit in lower bills. But if Dominion succeeds in this rate freeze, it will rack up years of overcharges, unchecked by the SCC’s oversight and authority to order refunds.”
Dominion officials dispute that. Since the bill has garnered criticism, they launched a public relations campaign in support of the legislation.
The company noted that in the Senate, the bill was amended to address the State Corporation Commission’s right to audit Dominion’s financial records at any time. (Even so, the SCC opposed the bill, saying it undercut the agency’s regulatory authority.)
A page of Dominion’s website is dedicated to promoting the bill, with a video and a message from the company’s president.
“We want to be able to continue that record of low rates, high reliability and environmental stewardship,” Robert M. Blue, president of Dominion Virginia Power, says on the website. “We believe it is in the best interest of both our customers and Dominion.”
The bill now heads to the House of Delegates for consideration.