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Attorney general pushes for legislation aimed at Dominion Energy's excess profits

Attorney general pushes for legislation aimed at Dominion Energy's excess profits

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Dominion Energy moved in fall 2019 to its new headquarters at 600 Canal Place.

A consumer advocate in the state Attorney General’s office asked lawmakers to support proposals to strengthen oversight of the state’s largest electric utility after years of utility-friendly laws tied regulators’ hands.

Meade Browder, a senior assistant attorney general, made his comments Monday during a House of Delegates subcommittee meeting where lawmakers advanced a group of bills aimed at Dominion Energy’s over-earnings. The legislation could lead to hundreds of millions in refunds for Dominion customers in Virginia.

Browder said the proposals would enhance the authority of the Virginia State Corporation Commission, which regulates investor-owned Dominion and other public-service corporations. At issue: The SCC has projected that Dominion, since 2017, earned more than $500 million above the fair profit allowed by law in exchange for operating an electric monopoly.

The Southern Environmental Law Center says the amount could end up being higher; Dominion will file paperwork by March 31 for a financial review this year, the first time the commission will have done one since 2015 because the legislature suspended such reviews at Dominion’s request.

“We’ve been aggressively representing ratepayers’ interests before the SCC for many years, but we’ve done so with one hand tied behind our back,” Browder told delegates. “And that’s due to legislation over the last six or seven years ... that’s been drafted by Dominion to serve Dominion’s purposes, rather than having the regulator regulate on a level playing field.”

Browder told lawmakers the fundamental issue is whether a utility is recovering its costs and a fair profit, and nothing more.

“Unfortunately in Virginia, that’s not how it works,” he said. “If they are recovering costs and a fair rate of return, plus excessive returns, the commission can’t do anything about it.”

The legislation isn’t objectionable as long as lawmakers have confidence the State Corporation Commission will be fair, he said.

“I’m sure there will be objections from the company, but I think you should take those with a grain of salt consistent with their position on past bills.”

Dominion lobbyist John Rust, a former member of the House of Delegates, told lawmakers Dominion opposes the bills because the company is about to begin the financial review, and the legislation could apply.

“The financial dealing with the markets has already happened. The ability to rely upon what decisions are being made” is “critical to the financial health of your utility,” he said. “If you pull that away and say what we’re going to do is make this up as we go along ... you have some real risks in the financial wealth — or health — of your utility.”

One of the bills would give regulators power over the time period under which Dominion can recover costs for large expenses. It would give the SCC authority to spread out cost recovery and lessen the impact on customers, supporters say.

Rust, however, said current law helped Dominion deal with major expenses, such as storm damage or Dominion’s plan to close coal ash ponds. Changing the law could make projects more expensive for the public, he said.

The subcommittee of the House Labor and Commerce Committee advanced the bills by votes of 6-4 and 6-3. One of the six House bills in the package was merged with another, leaving five pieces of legislation pending. Should the legislation be approved by the House, it is expected to face an uphill challenge in the Senate.

(804) 649-6061

Twitter: @patrickmwilson


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