Two state delegates representing Fairfax County joined 16 other state delegates in asking for an analysis of potential refunds and rates that could be made to customers of Dominion Energy if provisions in state law weren’t bound to be favorable to the utility company’s bottom line.
Delegates Ibraheem S. Samirah and L. Kaye Kory, both Democrats, signed July 30, a letter asking the State Corporation Commission’s Division of Public Utility Regulation about conducting a prospective analysis of potential affects that proposed legislation would have on the price that Virginian’s pay for energy.
Such an analysis of Dominion’s rates has been conducted in the past as recently as 2013 when it was found by the commission that rates existing at that time generated excess revenue as high as $280 million per year. The delegates who signed the letter believe that a new analysis should be conducted due to the Virginia Clean Economy Act which was passed back in 2020.
“This is Dominion’s first rate case since 2015 and the first since the passage of the VCEA. The utility is retiring nearly a billion dollars in fossil-fuel-fired power plants and embarking on a new era in energy investments. The massive scale and time horizon for these investments warrants a full analysis that ensures reliable service at a fair price for Virginia ratepayers,” stated Del. Sally Hudson (D-District 57) who spearheaded the letter to the commission.
The letter concedes that while the act seeks to transform the Commonwealth’s energy sector it will require some costly investments. Dominion is one area that the delegates are hoping to be able to cut costs and align the company’s rates with the cost of its service. The letter also states what it calls a well-known fact that Dominion has a track record of overcharging customers and inflating planning costs.
The letter cites Dominion’s own financial disclosures which showed that the company overcharged customers by $100 to 300 million above its authorized rate of return every year between 2015 and 2018. The letter also cites the Commission’s rejection of Dominion’s latest Integrated Resource Plan in Feb. 2020 concluding that the plan was neither “reasonable or in the public interest.”
The delegates asking the Commission to find out what the potential refunds would be if it wasn’t required to approve customer credit reinvestment offsets or were required to permit Dominion to keep 30% of its over earnings. They also ask that the analysis find out what rates the Commission would set if it were required to ensure that rates were just and reasonable while allowing the utility the opportunity to recover its costs plus its authorized rate of return.
The House of Delegates did attempt to address many of these matters directly earlier this year and passed bills designed to eliminated tools that utilities use to avoid refunding overcharges to customers as well as restore the Commission’s discretion to set rates under a traditional cost-of-service model.
Those bills were rejected by the Senate Commerce and Labor Committee on grounds regarding the uncertainty of the legislation’s impact on Dominion’s 2021 rate case.
Dominion commented to the Virginia Mercury about this potential analysis and received a reply from its spokesperson Rayhan Daudani who said “if the legislators want the SCC to do the analysis, then it’s up to the SCC.”