Home Virginia Politics Dominion Buys the Virginia Legislature: Part Infinity

Dominion Buys the Virginia Legislature: Part Infinity

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(UPDATE: I hear Commerce and Labor voted aye on this godawful Dominion bill (SB 1349 14-1. Yep, Dominion owns the place. – promoted by lowkell)

See the tweets below for the latest example of what Dominion Power’s money will buy in the Virginia General Assembly. As a Democratic Senate source of mine emailed me a few minutes ago: “Dominion gives them money, and they told them if they didn’t support it, they would pull the money… it only seems to take a few million dollars to buy off the legislature, and the entire state.” So, next time you hear a Virginia politician waxing on about how wonderful our state is, how much “better” we are than other states, etc, you might want to remind them that Dominion owns them.



  • MorrisMeyer

    Just now in conversation with my very conservative father we are both in complete agreement – when you give up your legislative responsibility for oversight you do not belong in the legislature.

    He says – “that is bribery”.

    For those Senate Democrats who voted for this.  This will not stand.  There will be a call for environmentalists to take these folks off of their fundraising lists.  There will be calls to ignore your pleas for activists to help out with door-knocking, phone-banking, data entry and other campaign activities.

    Until you completely renounce funds from Dominion, the environmentalists that are taken for granted are done with this anti-consumer nonsense.

    We will be reaching out to Republican activists who don’t believe that they should be taken to the cleaners by this out-of-control corporation.

    Game on.

  • Office of the Attorney General, Division of Consumer Counsel

    Senate Bill 1349 Substitute

    • SB1349 eliminates critical SCC oversight and consumer protections in the 2007 Regulation Act for the Commonwealth’s largest public utility under the pretext of a proposed environmental regulation. The ratemaking provisions of Enactment Clauses 2.A. and 2.B. are independent and unrelated to the EPA’s proposed § 111(d) carbon emissions rules.

    • By restricting and eliminating biennial reviews, SB1349 conflicts with the SCC’s statutory obligation to ensure “just and reasonable rates,” and voids virtually all of the consumer protections touted by Dominion in 2007 to support passage of the Regulation Act, including:

    “The SCC will have sweeping authority to set rates and review the books, records and costs of utilities” and “The legislation assures that consumers will share any increased utility earnings stemming from greater efficiency.”

    • The bill makes Dominion an unregulated public utility with respect to the majority of its revenues for the multi year transition rate period.

    • Two of the three Dominion base rate cases since 2007 have shown that the company’s rates are producing excess profits. These two cases resulted in rate credits or write offs benefitting customers totaling $800 million.

    • Through legislation Dominion has been able to avoid showing excess earnings in select years. It did not over earn in the 2011-12 period after 2013 legislation mandated specific treatment of certain costs, including costs related to coal plant retirements. Similarly, 2014 legislation will enable Dominion to accelerate the recognition of more than $300 million in costs in 2013-14 to report lower regulated earnings in a 2015 biennial review.

    • The SCC has found that Dominion’s current base rates are designed to produce $280 million annually in excess revenues, assuming normal regulatory accounting. This was not a “hypothetical,” but a factual finding by the SCC in the 2013 biennial review case. Over the course of a multi year base rate freeze, this would provide Dominion with significant revenues above its costs and a fair profit margin.

    • SB1349 would freeze these SCC-projected excessive rates under the rationale of “rate stability,” preventing the potential for customer refunds or rate reductions, and preventing the SCC from monitoring Dominion’s costs and revenues. This is a de facto rate increase on millions of Virginia citizens and businesses, compounded by the elimination of transparency in the regulatory oversight of the Commonwealth’s largest public utility.

    • “Rate stability” in the bill ignores the well-established regulatory principle of “just and reasonable” rates, which are rates designed to recover only the utility’s actual costs plus a fair return.

    • Dominion’s current residential electric rates are now higher than the South Atlantic average (as reported 7/1/14), and SB1349 does nothing to prevent Dominion rate increases in its fuel factor and separate rate adjustment clauses (RACs), including a RAC already available for environmental compliance costs. (Enactment Clause 2.C. provides only for a one-time partial write-off of fuel expenses that is modest in relation to annual base rate revenues.)

    • Enactment Clause 2.B. prevents the SCC from adjusting in 2015 Dominion’s 10.0% authorized return-on-equity (ROE) that was last set in 2013. The SCC reduced APCo’s allowed ROE from 10.0% to 9.70%, to reflect current market conditions, in APCo’s 2014 biennial review case. Locking in Dominion’s 10.0% ROE through 2017 could cause RAC rates  to be millions of dollars higher than they otherwise should be.

    • SB1349 is a contradiction. It is premised in part on the SCC Staff’s estimated projection of potential EPA § 111(d) compliance costs, yet the bill prevents the SCC from reviewing the majority of Dominion’s cost, revenues, and profits. It claims to protect ratepayers from the cost of write-offs on coal-fired generation plants to be retired for environmental compliance, yet the bill seeks to preserve the continued operation of such plants.

    • Only if Dominion were obligated to actually retire and write-off the value of coal plants during the rate freeze would there be any benefit to customers. But the bill does not do this; it attempts to do the opposite and ensure that plants are not retired. And if there are any plant retirements and write-offs, the bill includes no language to protect customers from those costs after the transition rate period.

    • The planned retirement of an electric generation plant, and any associated “impairment” of such asset for GAAP financial accounting purposes, does not dictate SCC rate treatment for regulatory accounting purposes. Under existing law, the SCC is equipped to address such matters in a manner that is fair to both customers and the utility.

    • SB1349’s base rate freeze does not protect Dominion’s customers from any future environmental compliance costs. Instead, it deprives them of the very means of mitigating such costs by allowing the regulated utility to divert to its parent company any and all surplus earnings through the transition rate period.

    • As counsel for Virginia consumers, the Attorney General’s Office would welcome the opportunity to work with stakeholders to explore mechanisms that could address potential environmental compliance costs in a manner that mitigates any impacts on ratepayers, and without eliminating transparency in the SCC regulatory review process.

  • MorrisMeyer

    Explain to me how with a very near even Senate breakdown how the Senate Commerce and Labor Committee winds up with an overwhelming majority of Republicans.

    http://lis.virginia.gov/cgi-bi

    http://leg1.state.va.us/cgi-bi

    All 4 Democrats abrogated their legislative oversight responsibility to Virginia rate-payers.  Only one Republican voted to at least have the chance to protect rate-payers.

    It would seem that Dominion would like this committee to be permanently out to lunch.