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Virginia Sierra Club: Gov. Northam has the right ideas about ending the “rate freeze”

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From the Virginia Sierra Club; I’d just add a raised middle finger to Dominion…

RICHMOND, Virginia– The Sierra Club Virginia Chapter opposes Senate Bills 966 and 967, sponsored by Sen. Wagner and Sen. Saslaw respectively and House Bill 1558, sponsored by Del. Kilgore and Del. Bagby, unless they are amended in line with the Governor’s suggested changes, including:

  1. Increase the amount of money refunded to ratepayers to reflect amount of money that has been overcharged so far. Involve the State Corporation Commission in that process.
  2. Increase the focus on clean energy and clarify the meaning of grid modernization. Involve the SCC so that Virginians will know which investments utilities are making with their money and be sure that they are getting the best bang for their buck.
  3. Restore the SCC’s authority to ensure that, moving forward, Virginia families and businesses do not pay more for power than they should under state law.

In order to support legislation overhauling the “rate freeze,” there would also have to be requirements in the bill for significant investment in renewable energy and energy efficiency programs that both lower customer electric bills and reduce energy waste, cleaning up our environment.

This legislation is poised to end the “rate freeze” put in place by Senate Bill 1349 in 2015, which suspended SCC oversight, effectively freezing base electricity rates, preventing base rate adjustments and suspending any refunds to customers. As written, the bill would make it highly improbable that rates will be lowered during future rate cases, so it will have the same practical effect as a rate freeze extension. According to the SCC, Dominion Energy over-collected between $327.8 and $705.2 million dollars in 2015 and 2016. SCC numbers from 2017 are not available. (See appendix.) This legislation would refund just $133 million dollars via bill credits to customers from that pot of over-earnings.

In response, Kate Addleson, Director of the Sierra Club Virginia Chapter, released the following statement.

This bill emphatically fails to fix the “rate freeze.” Virginians who pay an electricity bill to Dominion Energy have been paying too much for years, but this legislation proposes to refund mere pennies on the dollar while Dominion sits on hundreds of millions of dollars of ill-gotten profit collected under the “rate freeze.”

Gov. Northam’s proposal to amend the bill, increasing money refunded to Virginia families and businesses, is the right approach. Complete transparency and oversight during this process is the only way to effectively check our monopoly utilities, who have profited under the “rate freeze” at the expense of their customers, including working families and seniors living on fixed incomes.

If lawmakers really want to lower electricity bills and modernize the electric grid, they should demand mandatory minimums for energy efficiency, which would both save customers money and benefit our environment. Currently, there is no guarantee of clean energy and energy efficiency investments in this bill.
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About the Sierra Club Virginia Chapter: The Virginia Chapter of the Sierra Club is over 20,000 members strong. We are your friends and neighbors working to build healthy, livable communities, and to conserve and protect our climate and environment. The Virginia Chapter is part of the national Sierra Club, the nation’s largest and most influential grassroots environmental organization. For more information, visit http://www.sierraclub.org/virginia

Appendix: SCC Estimates of Utility Over-Earnings During Rate Freeze Dominion Energy

Low End

High End

20151

$106.7 million

$278.9 million

20162

$221.1 million

$426.3 million

2017

TBD

TBD

TOTAL: $327.8 million – $705.2 million3

Appalachian Power Company

Low End4

High End

20145

$35.2 million

$35.2 million

20156

$35.8 million

$35.8 million

20167

$22.6 million

$27.9 million

2017

TBD

TBD

TOTAL: $93.6 million – $98.9 million8

1 Status Report: Implementation of the Virginia Electric Utility Regulation Act Pursuant to § 56-596 B of the Code of Virginia (Sept. 1, 2016) (“2016 Report”) at 6 (https://www.scc.virginia.gov/comm/reports/2016_veur.pdf). Calendar year 2015 was the first year of the rate freeze for Dominion Energy.
2 Status Report: Implementation of the Virginia Electric Utility Regulation Act Pursuant to § 56-596 B of the Code of Virginia (Sept. 1, 2017) (“2017 Report”) at 6-7 (https://www.scc.virginia.gov/comm/reports/2017_veurcomb.pdf).

3 Total does not include over-earnings collected during 2017 as the SCC has not yet reported on those results.
4 For 2014 and 2015, the SCC did not estimate a low end and high end.
5 2016 Report at 7-8. Calendar year 2014 was the first year of the rate freeze for Appalachian Power Company. 6 2016 Report at 7-8.
7 2017 Report at 9.
8 Total does not include over-earnings collected during 2017 as the SCC has not yet reported on those results.