Dominion and the politicians on their payroll give one justification for the power play bill that exempts the monopoly from govenrment audits until the year 2022 — that EPA climate regulations will increase the company’s costs, forcing it to raise its rates.
When companies face a financial threat, no one is more attuned to this situation than investors. If Dominion is truly in trouble, the alarm bells should be ringing on Wall Street. But are they?
Quite the contrary. In a superb piece on Dominion’s endless drive to deregulate itself, Jeff Schapiro drops this bombshell:
As momentum built for Virginia’s latest accommodation of the utilities, the investment adviser UBS – in an alert to the markets – labeled Dominion the “king of the hill.”
Citing the company’s spin to stock pickers at a private meeting in Manhattan last week, UBS said the latest legislation “removes one of the largest single risks” to higher earnings: That the SCC, if only temporarily, would be blocked from determining whether Dominion makes too much money.
Now, hold your horses — we keep being told this legislation is needed to protect the poor consumer. Yet behind closed doors, Wall Street analysts are admitting that this legislation is really about letting Dominion profit — at ratepayers’ expense?
But wait, there’s more. Here’s what UBS had to say about Dominion last month:
Many analysts on Wall Street think that the EPA bill signed last year may actually provide a tailwind for this top utility.
A tailwind? I’m no top gun, but I know that a tailwind is a good thing. Wall Street’s brightest analysts, in other words, are saying the exact opposite of what we’re being told in order to sell us a bad bill — that EPA climate regulations will actually help, not hurt Dominion.
Nor is that all. Whereas a majority of US states require their utilities to buy renewable power, Virginia, at Dominion’s insistence, has avoided such mandates. Dominion has been investing in wind and solar on its own timetable. But guess what — Wall Street is citing these renewable purchases as a benefit, not a burden to the company’s bottom line. Just listen to Investorplace:
Dominion enjoys several inherent strengths that should propel revenue and earnings in future quarters. The company has been boosting its capital expenditures to grow its electric and natural gas businesses and is extending operations throughout the Mid-Atlantic. The company also has been beefing up its renewable energy portfolio.
Renewables, in other words, are a good investment, and Dominion improves its financial future by getting more deeply into them.
So is Dominion in any jeopardy at all? No, analysts across the board are describing it as a Buy or Hold opportunity.
In short, then, all the justifications we’ve been given for the power play bill are flatly contradicted by the experts who spend the most time vetting companies’ financial condition. EPA’s proposed regulation, and pressure on the utility to increase its commitment to renewables, benefit the company, its investors and its ratepayers. Conversely, taking the pressure off of Dominion to become a 21st century energy company hurts us all.
And yet, the latter, not the former, is what the vast majority of state legislators, Democratic and Republican, just voted to do.
Governor McAuliffe, it’s your turn to end this farce and veto this bill. Listen to Wall Street — and your crusading Attorney General, Mark Herring — not the Dominion lobbyists (putting aside the $160,000 they’ve given you in the last two years).
History will judge you as it’s judging our last governor, who put lobbyists first — and is now, as a result, headed to a less glamorous address.