By Michael Brooks
A Virginia Senate subcommittee has passed a bill that would freeze Dominion Virginia Power customers’ base rates and bar state regulators from reviewing the utility’s revenue until after 2020.
The bill, SB1349, is among the most controversial in a group of bills introduced by Virginia lawmakers in reaction to the U.S. Environmental Protection Agency’s proposed rule on carbon emissions from existing power plants.
The bill’s sponsor, Republican Sen. Frank Wagner, says it is designed to protect Dominion customers from rate increases that they would incur as a result of coal plant retirements due to compliance with the EPA’s Clean Power Plan.
But critics, such as state Attorney General Mark Herring, aren’t so sure. They point to a projected $280 million earnings surplus in the utility’s Integrated Resource Plan. If the State Corporation Commission finds through its biennial review that the company earned too much money for the past two years, it can order the utility to lower its rates or issue refunds to customers.
Under the bill, Dominion would be able to keep any earnings surpluses. Although base rates would be frozen, the utility would be able to seek surcharges for new technology and infrastructure, subject to SCC approval.
“We’re pretty confused as to why Dominion is introducing this bill,” said Dawone Robinson, Virginia policy director for the Chesapeake Climate Action Network. “This indicates to me that Dominion believes that rates would actually go down under the Clean Power Plan.”
Wagner has said the bill is a work in progress, according to The Daily Press. The original version of the bill, which Wagner said that Dominion helped him write, would have prevented the SCC from conducting its reviews beginning this year. The version of the bill that passed the subcommittee Thursday will allow this year’s review of Dominion’s revenue in 2013 and 2014 to go forward as scheduled.
“I will vote to move it along, but I would just say this has a long way to go,” Senate Minority Leader Richard L. Saslaw (D-Fairfax) said, according to The Washington Post. “I’m somewhat concerned about not having this biennial review.”
The bill was scheduled to go before the full Senate Commerce and Labor Committee yesterday.
“The reason we support the proposed legislation is simple,” Robert M. Blue, president of Dominion, said in a statement. “We want to be able to continue that record of low rates, high reliability and environmental stewardship. We believe it is in the best interest of both our customers and Dominion.”
No Fans of EPA
Wagner isn’t the only Virginia legislator who is not a fan of the Clean Power Plan.
On Jan. 20, Republican Sen. John Watkins introduced SB1365, which would require the state’s Department of Environmental Quality to submit its compliance plan for approval from the General Assembly before sending it to the EPA. Another Wagner-sponsored bill, SB1202, would prohibit the DEQ from submitting a plan until the SCC essentially approved the Clean Power Plan. The commission’s staff gave the plan a scathing review in October. (See Va. SCC Staff Blast EPA Carbon Rule.)
On Friday, the House Committee on Rules passed HJ608, introduced by Republican Del. Terry Kilgore. Under the resolution, the state would voice its opposition to the EPA’s emission rules because they “infringe on the commonwealth’s sovereign powers to regulate electricity for the benefit and welfare of its citizens.” The resolution passed the committee by a 12-3 vote.
