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

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 21^st 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 21^st-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.