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Dominion’s “Grid Modernization” Bill Is a Sham, Will Make Dominion Customers Worse Off In Many Ways

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by Karen Torrent, Esq., an energy attorney who represented herself as a Dominion customer in challenging the constitutionality of Dominion’s rate freeze before the Virginia Supreme Court, which upheld the law.  (See Old Dominion Committee for Fair Utility Rates v. State Corp. Commission.)

The Virginia General Assembly is poised to pass the Dominion-inspired rip-off sequel to the 2015 Rate Freeze Bill, this time framed as “the Grid Modernization Act of 2018.”  Make no mistake; HB 1558 is simply an extension of the rate freeze bill and, in fact, will be even worse for consumers. The two governmental bodies, the State Corporation Commission and the Virginia Attorney General’s Office of Consumer Affairs, who are duty bound under the Virginia Constitution to protect consumers from overzealous utility monopolies, share this conclusion, by the way.

Setting aside the fact that Dominion will be allowed to keep millions of ratepayer dollars for the years 2015 to 2021, and in return refund pennies on the dollar to ratepayers, the ways in which Dominion consumers will be worse off under this bill, as opposed to current law, include:

  • Inflated electricity rates and higher bills for 10 years, resulting from substantial customer overcharges and double charges amounting to tens of billions of dollars;
  • No rate decreases for 10 years for residential, commercial and industrial entities;
  • Extending the period between SCC rate reviews to every 3 years;
  • Limiting the SCC’s authority and duty to regulate Dominion;
  • No mandatory requirements to deploy renewable energy, only voluntary goals; and,
  • Zero transparency and accountability on how Dominion “invests” our tens of billions of dollars to “modernize” the distribution and transmission of its energy on the grid.

This “Grid Modernization” bill is anything but those things.

Grid modernization involves legislative and regulatory actions to make the electricity system more resilient, responsive and interactive. It includes considering a host of technologies, such as smart grid and advanced metering infrastructure, utility business model reform, regulatory reform, utility rate reform, energy storage, microgrids and demand response.  Approximately 14 states, including our neighboring states of Maryland and North Carolina, are currently undergoing some type of grid modernization proceeding with input from stakeholders and the public.

All of these proceedings are being conducted by their state’s public utility commission, pursuant to either administrative action, legislation by the state assembly or executive order by the governor. Because electricity distribution systems are deemed by states to be a public asset, states are proceeding very methodically over the course of years to assure that their grids are customer-centric, affordable, reliable, and environmentally sustainable. No other state allows the investor-owned utility to dictate when, where, what and how much consumers will pay to modernize the grids in their state — and Virginia should not either.

The Virginia General Assembly wrongly justifies funneling tens of billions of dollars in consumer overpayments and double charges to Dominion because, supposedly, Dominion will then “invest” in modernizing the grid by deploying onshore and offshore wind projects, utility-scale solar projects, electric vehicles infrastructure, and energy storage in Virginia. However, there is absolutely no assurance that any of this will happen. 

The bill does not mandate the deployment of any of these technologies. Rather, it sets voluntary goals for Dominion, with no penalty for not attaining them.  Further, it is extremely doubtful that deploying renewables is a preference for Dominion, given that the company spoke out against all of the bills that would have reduced greenhouse gas emissions and opened up Virginia’s market to more solar development.

While the legislature should be complimented for its efforts to finally bring Virginia’s energy services into the 21st century, the Assembly can accomplish this under current law — without abdicating the SCC’s regulatory authority to Dominion and without gouging consumers.

If the Assembly truly wants to improve the Commonwealth’s ability to compete in the 21st-century economy, protect consumers, and improve the grid, then it should allow the public institutions which are vested with the constitutional authority and duty, not to mention technical expertise, to do their job. The Assembly should pass a bill directing the SCC to open a grid modernization docket to evaluate and define a long-term plan for modernizing Virginia’s energy choices, decoupling utility’s profits from electricity sales, implementing new technologies, and protecting consumers.  Now, THAT is a bill that would be in the “public interest” – as opposed to the Dominion bill being rushed through the General Assembly right now.

 

  • Also, check out this excellent letter from Sharon Shutler to House Democratic Leader Toscano:

    Dear Delegate Toscano,

    I am an on the executive committee of We Of Action, one of the active “pop up” Indivisible groups in Northern Virginia involved in the 2017 HoD campaigns. I’m also a retired attorney from the Department of Justice.

    This bill has my caught attention and that of many of our Indivisible groups. We hope you will vote to oppose HB1558. I understand that amendments were brokered by the the Governors’ working group and currently has the blessing of the Governor. For this reason alone, I recognize it is hard for Democrats to oppose this bill. But as I’m sure you well know, this bill is seriously flawed for many reasons. Below are the four biggest.

    1. Fundamentally reduces the authority of the SCC to review rates and order refunds for over-earnings. Under the bill, reviews are now ever 3 years rather than every 2. But over-earnings must be established over 6 years (2 review periods) and consumers would not receive potential refunds until after 6 years. More troubling is that utilities can reduce consumer refunds by the amount utilities spend on distribution grid transformation projects and renewable generation on a $ for $ basis. Thus, the rate payer may never get the rebate for over-earnings. We need a simple repeal of the rate freeze, perhaps more aptly called, the SCC “rate review freeze.”

    2. Double Dip. Not only do the proposed amendments allow utilities to keep future excess earnings – i.e. ratepayer over payments – and use them for capital projects chosen by the utility, but also the amendments permit the utilities to charge consumers for these same projects in base bills.

    3. SCC review over what constitutes distribution grid transformation projects and renewable generation is virtually emasculated. Projects identified in the proposed legislation are automatically deemed “in the public interest” minimizing the authority of the SCC to evaluate whether such projects are cost effective or whether their are alternatives at lower costs to the customers. This means the utilities get to pick what projects are in the public interest – whether they truly further use of renewables or energy efficiency or are cost effective. This is a classic example of the fox guarding the henhouse.

    4. Over-earnings from 2015-2017 are determined by Dominion and not the SCC. Dominion has asserted that it accrued $133 million in over-earnings during the initial rate freeze. The SCC should undertake its own determination of over-earnings, not simply rely on what Dominion has proffered.

    It would have been far better to have had a straight repeal of the rate freeze, as offered by Sam Rasoul. Grid transformation is a critically important and complex issue. It should be addressed separately in a thoughtful process with independent experts. It should not be included in HB1558 in its current form.

  • Another helpful graphic to use for killing the Dominion bill

    http://bluevirginia.us/wp-content/uploads/2018/02/stopthescam.jpg

  • Also check out this ad…and don’t get robbed by Dominion on Tuesday!

    https://www.youtube.com/watch?v=b-9Vfg-lWus

  • Harry

    If it s good for Dominion it s bad for Virginia

  • vlady47

    Every year it’s the same story. Dominions minions in legislative sheep skins making sure they get exactly what they want.

    • vlady47

      HB 1558 Electric utility regulation; grid modernization, energy efficiency programs.

      floor: 02/12/18 House: VOTE: ADOPTION #2 (96-Y 1-N 2-A)
      YEAS–Adams, D.M., Adams, L.R., Aird, Ayala, Bagby, Bell, Richard P., Bell, Robert B., Bloxom, Bourne, Boysko, Brewer, Bulova, Byron, Campbell, Carr, Carroll Foy, Carter, Cline, Cole, Collins, Convirs-Fowler, Davis, Delaney, Edmunds, Fariss, Filler-Corn, Fowler, Freitas, Garrett, Gilbert, Gooditis, Guzman, Habeeb, Hayes, Head, Helsel, Heretick, Herring, Hodges, Hope, Hugo, Hurst, Ingram, James, Jones, J.C., Keam, Kilgore, Knight, Kory, Krizek, Landes, LaRock, Levine, Lindsey, Lopez, Marshall, McGuire, McQuinn, Miyares, Morefield, Mullin, Murphy, O’Quinn, Orrock, Peace, Pillion, Plum, Pogge, Poindexter, Price, Ransone, Rasoul, Reid, Robinson, Rodman, Roem, Rush, Sickles, Simon, Stolle, Sullivan, Thomas, Torian, Toscano, Tran, Turpin, Tyler, VanValkenburg, Ward, Ware, Watts, Webert, Wilt, Wright, Yancey, Mr. Speaker–96.

      NAYS–Bell, John J.–1.

      ABSTENTIONS–Jones, S.C., Leftwich–2.

      NOT VOTING–Austin–1.

      Delegate Bell, John J. was recorded as nay. Intended to vote yea.

      • vlady47

        SB 966 Electric utility regulation; grid modernization, energy efficiency.
        log in | tally sheet
        floor: 02/09/18 Senate: Read third time and passed Senate (26-Y 13-N)
        YEAS–Barker, Carrico, Chafin, Cosgrove, Dance, DeSteph, Dunnavant, Edwards, Favola, Hanger, Howell, Lewis, Lucas, Marsden, Mason, McDougle, Norment, Obenshain, Reeves, Ruff, Saslaw, Spruill, Sturtevant, Surovell, Vogel, Wagner–26.

        NAYS–Black, Chase, Deeds, Ebbin, McClellan, McPike, Newman, Peake, Petersen, Stanley, Stuart, Suetterlein, Wexton–13.

        RULE 36–0.

        NOT VOTING–Locke–1.

      • This vote was for Del. Toscano’s amendment against “double dipping” by Dominion.