By Shannon Baker-Branstetter
If you’re a Dominion Energy customer, odds are you’ve been overpaying for electricity and should be given a refund. But you’re unlikely to get that refund any time soon, thanks to a 2015 law that prevents it.
According to a report by the commonwealth’s State Corporation Commission (SCC), Dominion Energy owes its customers $133 million today, which could grow to $1 billion by 2020.
How is Dominion able to get away with this? In 2015, Dominion lobbied to pass a bill in the state legislature called SB 1349. Under SB 1349, the SCC, which is responsible for regulating electric utilities, can no longer order refunds even when it finds that Dominion has collected revenues in excess of the generous 10 percent guaranteed profit that the SCC has approved.
Dominion claimed this legislation would freeze utility rates in the name of protecting consumers from any rate hikes that might result from the Clean Power Plan (a federal program to reduce carbon emissions from power plants). But in reality, Dominion’s costs for producing electricity have gone down, not up.
Consumers should be getting refunds because they were overcharged, but SB 1349 took away the state’s power to order refunds, allowing Dominion to keep overpayments from consumers instead.
Preventing utilities from using their monopoly power to engage in abusive practices that harm consumers is a central purpose of the SCC. The regulations that guide this oversight specify that “public service corporations,” which are state-granted monopolies like Dominion Energy, must serve the interests of the public, both in level of service and cost to the consumer.
Unfortunately, Dominion Energy’s withholding of customer overpayments is not serving the interests of the public and now SB 1349, which doesn’t expire until 2020, is shielding it from effective oversight, instead of protecting consumers.
Earlier this month, the state Supreme Court upheld SB 1349 on constitutional grounds. The decision, however, did not weigh in on the merits of the law. It simply found that the legislature had the authority to set limits on utility rate reviews.
Dominion’s ability to overcharge consumers is a problem created by the legislature, at the behest of the powerful utility. It is now critical that the legislature act to undo the harm from the anti-consumer provisions of a law that blocks consumer refunds and restrains the state regulator from proper oversight.
Consumers Union is encouraged by a series of legislative proposals soon to be introduced in the Virginia Senate. Developed by Sen. Chap Petersen (D-Fairfax City), the proposals aim to re-balance the scales in favor of consumers.
The provisions include: re-empowering the State Corporation Commission to review Dominion earnings and order refunds when necessary, adding two new members to the SCC who will represent the consumer interest, banning monopolies from donating to political campaigns, and establishing funding for the SCC to commission independent research by non-utility-funded experts.
Together, these provisions provide more oversight to check Dominion’s power and rebalance the scales of power so that residential consumers are protected and fairly represented in decision-making that affects their daily lives and monthly bills. Consumers Union has more than 10,000 members in Virginia, thousands of whom have voiced their support for similar reforms with their legislators.
Consumers deserve a voice and a level playing field. We will fight to ensure they receive both by restoring the public interest in utility policy in the Commonwealth of Virginia.
Shannon Baker-Branstetter is the senior policy counsel for energy for Consumers Union, the policy and mobilization division of Consumer Reports.
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