Shannon Baker-Branstetter: Dominion owes you $130 million and counting

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.
 
Read More – http://www.richmond.com/opinion/their-opinion/guest-columnists/shannon-baker-branstetter-dominion-owes-you-million-and-counting/article_5f05a487-e16d-58a0-8445-65f132981535.html

EDITORIAL: Governor, General Assembly blocked billion-dollar refund to utility customers

Thanks to legislation passed in 2015, Virginia’s two largest investor-owned electric utilities will pocket more than $1 billion in overcharges over the next seven years, according to the State Corporation Commission.
 
That extra $1 billion will come directly from the pockets of its customers, who account for 81.4 percent of all electricity consumers in Virginia.
 
The two Richmond-based utilities—Appalachian Power Company and Dominion Virginia Power—are both government-approved monopolies. In the past, in return for being able to operate without competition, they have had to undergo base rate reviews every two years by the SCC, which has the power to approve or deny a rate increase.
 
The independent state agency can also order the utilities to refund money collected in excess of what the commission considers a “fair return” to shareholders.
 
For a century, the SCC’s regulatory oversight worked well. It allowed utilities to recoup their costs and amply reward their investors, while making sure they did not use their monopoly status to gouge consumers.
 
That all changed in 2015, when the General Assembly passed, and Gov. McAuliffe signed, amendments to the 2007 Virginia Electric Utility Regulation Act that suspended the SCC’s biennial review of APCO’s base rate for four years and Dominion’s rate review for five years.
 
After subtracting the cost of providing electric service to its customers, Dominion reported a 12.87 percent earned rate of return on equity for calendar year 2016. But that exceeded the 9.6 percent most recently allowed by the commission, costing Dominion customers an extra $251.9 million, according to a Sept. 1 report to Gov. McAuliffe and the General Assembly.
 
APCO’s 11.09 percent earned rate of return was also higher than the 9.4 percent the SCC determined to be fair, costing its customers an extra $27.9 million in 2016.
 
The end result of the rate freeze is that both utilities are currently charging their consumers much more for electricity than the SCC considers fair and, with Richmond’s blessing, will continue to do so.
 
Why would the governor and state legislators override the SCC and do something so completely at odds with the best interests of their constituents?
 
According to the Virginia Public Access Project, Dominion was one of the top political donors in 2014-15, handing out $1.3 million to state candidates of both parties, while APCO’s bipartisan donations totaled $225,493.
 
Since the utilities are now allowed to pocket a billion dollars in overcharges that should rightly have been returned to their customers, for them it appears to be money well spent.
 
A group of APCO’s industrial customers filed a lawsuit arguing that the General Assembly’s rate freeze was unconstitutional because it prevented the SCC from exercising its constitutional mandate to protect consumers. They cited Article IX, Section 2 of the voter-approved 1971 Constitution of Virginia, which gives the SCC authority to regulate electricity rates.
 
But the Virginia Supreme Court disagreed. In a 6-1 decision on Sept. 14, the court ruled that the state Constitution gives the General Assembly the power to regulate electricity rates, which it then delegates to the SCC, so the legislature is within its rights to override the agency.
 
The lone dissenter was Justice William Mims, himself a former state legislator, who pointed out that the majority failed to “explain how that constitutional provision can possibly represent a delegation of power by the General Assembly, rather than by the people of Virginia who adopted it.”
 
The court has spoken, but if the General Assembly has the power to freeze the SCC’s electric rate reviews, it also has the power to unfreeze them to benefit the people of Virginia, who deserve much better from their elected representatives.
 
Read More – http://bit.ly/2wYXrYo

Richmond Times-Dispatch: Virginia Supreme Court upholds law freezing electric rate reviews, but with strong dissent

By MICHAEL MARTZ AND ROBERT ZULLO
 
The Supreme Court of Virginia has upheld a hotly disputed state law that suspends regulatory reviews of electric utility rates and, according to reports prepared by state regulators, will allow the state’s large utilities to pocket hundreds of millions in earnings they would otherwise have to return to customers.
 
Justice William C. Mims dissented from the majority’s 6-1 decision on Thursday in a lengthy opinion that says the ruling would allow the General Assembly to permanently block the State Corporation Commission from exercising regulatory authority enshrined in the state Constitution.
 
“That sobering outcome thwarts the purpose behind creating the commission in the first place,” said Mims, a former legislator who, as deputy attorney general in 2007, played a critical role in the creation of the system of rate reviews that the General Assembly suspended in 2015 for seven years.
 
The majority opinion, written by Justice Elizabeth A. McClanahan, cites the presumption that legislative actions, such as the 2015 suspension of rate reviews, are constitutional unless “plainly repugnant” to the Virginia and U.S. constitutions.
 
“This strong presumption reflects the breadth of legislative power in Virginia,” McClanahan wrote.
 
 
Consumer advocates assailed the decision, citing a recent SCC report that concluded that Dominion Energy Virginia had overearned by up to $252 million and ratepayers should have been refunded at least $133 million.
 
“This ruling means that Dominion Energy Virginia will continue to pocket hundreds of millions of dollars owed to Virginia families who were overcharged for several years,” said Shannon Baker-Branstetter, policy counsel for Consumers Union.
 
“The decision also means the Virginia State Corporation Commission, charged with protecting the consumer interest, will continue to be constrained in their ability to regulate the state’s largest utility monopoly,” Baker-Branstetter said.
 
 
Sen. J. Chapman Petersen, D-Fairfax City, who fought unsuccessfully to overturn the 2015 rate freeze law in the last General Assembly session, said he was disappointed but not surprised by the ruling.
 
“To rule a statute unconstitutional is very unusual,” said Petersen, a lawyer. “Statutes are presumed to be constitutional. Judges will read anything that they can into them to find them constitutional, and that’s what happened here.”
 
He said Mims’ dissent hit the mark.
 
“Why have a State Corporation Commission and say they’re going to be in charge of regulating utilities if you’re going to let the General Assembly arbitrarily suspend that?” he said. “They could do it for 50 years; they could do it forever.
 
“They could say that ‘We find that world history is inherently unstable, North Korea has nuclear weapons … the Cleveland Indians are winning 22 games in a row.”
 
Petersen said he will revive legislation during the next session seeking to bring back rate review and ban political contributions from regulated monopolies. Dominion is the top corporate donor to state legislative candidates, giving nearly $4.6 million since 1996, according to the Virginia Public Access Project.
 
“Dominion is sort of head and shoulders in terms of their influence in the General Assembly,” said Petersen, who has also taken the company’s campaign cash. “Some of it is money, but a lot of it is a lot of people in the General Assembly don’t understand these issues.”
 
Ken Cuccinelli, the former GOP state senator, attorney general and gubernatorial candidate, said the court’s decision shifts the debate to the candidates running for governor and for seats in the House of Delegates. The court’s decision, he said, eviscerates the protections for consumers in the 1971 Constitution against overearning by monopoly utilities.
 
“Now it’s up to the legislature to fix this, and that’s a tall order since they did this in the first place,” said Cuccinelli, who filed a brief supporting the challenge to the rate freeze law on behalf of the Virginia Poverty Law Center. “There’s no difference between the legislature granting Dominion and (Appalachian Power) windfall profits and raising taxes.”
 
The General Assembly, Cuccinelli said, needs to hand over electric rate regulation to the SCC “100 percent.”
 
“They are stealing from poor people to give to these two companies,” he said.
 
The next General Assembly session, Cuccinelli said, will be a crucial test of the body.
 
“What we’re going to find out is: Is the General Assembly an independent entity or a wholly owned subsidiary of Dominion Power?”
 
Read More – http://bit.ly/2jEgmRZ

AP: Virginia Supreme Court Upholds Electric Rate Review Law

By Alan Suderman

RICHMOND, Va. (AP) — The Virginia Supreme Court issued a ruling Thursday upholding a state law that has blocked millions of dollars in refunds to electric customers.

The court ruled 6-1 that the General Assembly is within its constitutional authority to temporarily suspend state regulators’ ability to adjust a portion of electric rates.

The 2015 law, which was shepherded through the General Assembly by Dominion Energy and passed with broad bipartisan support, was touted by proponents as a way to prevent rate spikes due to uncertainty around carbon regulations.

The legal challenge was brought by a group of large industrial electric customers and advocates for the poor. They and other critics of the law said it guts the State Corporation Commission, which is tasked with setting electric rates and was established more than a century ago as a bulwark against the politically powerful railroad companies. Dominion, the largest corporate donor to state lawmakers, is now the top power broker at the Capitol.

There is little dispute the law has helped the utilities’ profits. Using Dominion’s own figures, state regulators calculated in a recent report that the company’s customers would be due about a $130 million refund on bills paid in 2015 and 2016. Appalachian Power, the state’s other large regulated monopoly, had overearnings of more than $20 million in 2016, according to report.

The investment bank Goldman Sachs issued a report in June saying that the legal challenge to the law presented a “downside risk” to Dominion’s bottom line.

Democratic state Sen. Chap Petersen, a critic of the 2015 law, said the court’s ruling was disappointing. He plans to try and overturn the law during next year’s legislative session.

“There’s a lot more public scrutiny on these laws and on these votes,” Petersen said. “Now people are seeing exactly what they voted on in 2015.”

Read More – http://bit.ly/2wr09Wo

Report: Lower electric rates if not for 2015 law

By Alan Suderman

RICHMOND, Va.

A new report says customers of Virginia’s two largest electric monopolies would be paying lower bills if not for a 2015 law that temporarily blocks state regulators from reviewing and adjusting rates.

The State Corporation Commission issued a report last week that shows Dominion Energy and Appalachian Power are earning higher profits than they would be entitled to prior to passage of the 2015 law.

Dominion customers would be due about a $130 million refund on bills paid in 2015 and 2016. And the state’s largest electric utility’s rates would have been lowered so that it would earn upwards of $400 million less in 2018, depending on how the commission calculated the costs for coal ash clean up.

Dominion helped usher through the 2015 law, saying it was needed to provide rate stability in the face of potentially expensive federal carbon emission rules. Critics said at the time that the law was an unnecessary giveaway to the state’s most politically powerful company.

The law shields electric utilities from having to give refunds or lower their rates for several years even if regulators have found their base rates — which make up a majority of a customer’s bills — are too high. During the same period, it also bars utilities from raising their base rates if they aren’t enough to cover their costs.

Democratic state Sen. Chap Petersen, an opponent of the law, said Dominion helped write the legislation because it knew its rates were too high and the SCC’s report is unsurprising.

“The law worked as the authors intended,” Petersen said.

Read More – http://wapo.st/2xKLh5p

Petersen Senate Sentinel: Charlottesville

Friends, Virginians, Citizens of Fairfax
As a young man, I spent many formative years in Charlottesville, a charming and historic college town. There I first got involved I politics, working on Bill Clinton’s Presidential campaign in 1992. Like most college towns, politics in C’ville was left of center, but with a graciousness for political differences that was downright neighborly.
Twenty-five years later, Charlottesville has been marred by a truly shocking show of violence as white nationalist groups spent hours fighting with counter-protestors, eventually leading to the death of three innocents, two of whom were Virginia state troopers.
 
These riots continued over two days with innocent people being threatened and beaten. It was clear that the intention of the white nationalists was to intimidate and threaten minorities and students. I usually resist glib comparisons of today’s America to 1930’s Germany, but the inspiration for certain tactics like torchlight parades is both obvious and odious.
 
Killing or harming innocent people is an act of evil. There is no justification for it, political or otherwise. Frightening and attacking people based on their skin color or religion is an act of evil. Period.
 
Nobody over the last eight years has been a bigger free speech advocate, but “free speech” does not allow you to attend a race riot with clubs and brass knuckles. That should never happen.
 
This is not a fundraising request or attempt to build my email list. It’s a statement to our community about my honest feelings about this weekend’s event. And for what it’s worth my ancestors fought with General Lee — and he would never have participated in this crap.
 
JCP NOTES: On Friday, September 1st, I will host a fundraiser along with Senator Mamie Locke (D-Hampton) on behalf of Lt. Governor Justin Fairfax at my law offices, 3970 Chain Bridge Road, Fairfax VA 22030. Please rsvp to Kathy@fairfaxsenator.com.
 
In Fairfax, you can reach me at Kathy@FairfaxSenator.com or 703-349-3361. Our address is PO Box 1066, Fairfax VA 22038.
 
Let us know how we can represent you better.
 
– Chap

Radio IQ: The Ever-Rising Cost of Tuition in Virginia

By Michael Pope

Ask voters what issues they are concerned about on the campaign trail, and one that comes up again and again is the cost of college debt. Michael Pope reports that’s because of a sharp increase in the cost of college.

Hold your wallet, folks. The cost of tuition at state colleges and universities has increased 71% over the last decade. 71 %. One reason for that is reduced funding from state government. Another is rising enrollment. Quentin Kidd at Christopher Newport University suspects competition for students plays a key role.

“It’s almost like an arms race. If you don’t have the best dorms, if you don’t have the best recreational facilities, if you don’t have all the technology that everybody else has in the classrooms, you risk losing students in that race to get students.”

Colleges and universities have to pay for all those upgraded dorms and recreational facilities and classroom technology. So they turn to out-of state students, who pay about twice as much in tuition as in-state students. State Senator Chap Petersen says that creates a burden on Virginia students who can’t get into schools strictly because the colleges and universities want those out-of-state tuition checks.

“These are state universities and once you get a certain critical mass of out of state students the General Assembly is going to step in and put restrictions on it. And I support that.”

Petersen says he plans on raising this issue when he returns to Richmond for the next General Assembly session.

Read More – http://bit.ly/2tR6AjQ

WashPost: A boost for Planned Parenthood, an end to stealthy tuition hikes

By Laura Vozzella and Ovetta Wiggins

Maryland can claim a first on Saturday, when it stands ready to pay Planned Parenthood clinics for their services if Congress defunds the organization.

Next door in Virginia, the day will bring good news for ticket scalpers and people with unpaid court fines, but bad tidings for university boards that want to jack up tuition while no one is looking.

A slew of new laws are coming to both states, some consequential, some quirky, all united by their July 1 effective date.

State-funded colleges and universities planning to increase tuition will not be able to do so in the dark of night, under a law meant to boost transparency in higher education. Proposed by Sen. J. Chapman “Chap” Petersen (D-Fairfax), the measure requires university governing boards to provide 30 days’ notice to students and the public before boosting undergraduate tuition or mandatory fees. The notice must include a projected range for the increase, a rationale for it, and the date and location for the vote.

Read More – http://wapo.st/2sGEOWW

AP: Dominion overcharged some customers on electric bills

RICHMOND, Va. (AP) — Virginia’s largest regulated electricity monopoly says it overcharged some of its customers for years by not properly reading their meters, but isn’t sure how far back the problem may go.

Dominion Energy recently filed a motion with the State Corporation Commission saying it may have overcharged 24,000 small to mid-sized commercial customers between 2013 and 2016 because Dominion’s meter readers were not resetting meters each month to track peak demand. Commercial customers are charged monthly, based on a combination of how much electricity they use and their highest demand for electricity, and some meters need to be physically reset.

State Sen. Chap Petersen, a frequent Dominion critic, said the overcharging “goes to show” the need for greater consumer protections in Virginia. He recently unveiled plans for legislation to create a type of ombudsman to represent Dominion customers.

Dominion serves the eastern two-thirds of Virginia, where its rates, natural gas pipeline plans and outsized political influence have been frequent talking points in Virginia’s closely watched gubernatorial race.

Read More – http://apne.ws/2qU9EKV

Daily Press: State senator wants to ban Dominion Energy campaign contributions

One of the few legislators pushing back against Dominion Energy Virginia’s influence over state government said Thursday that he hopes to harness a populist wave against the energy giant to pass major reforms in Virginia.

Those include a new ban on campaign contributions from Dominion and other public service corporations, as well as an upheaval at the State Corporation Commission, the government branch tasked with regulating utilities and other businesses.

State Sen. Chap Petersen, D-Fairfax, wants to add two members to that commission, which is elected by the General Assembly and decides whether electric rate increases are merited. That would bring it up to five members.

Petersen also wants to add a layer to that process, empowering new “intervenors” to represent consumers before the commission as it weighs rate hike requests. It was unclear Thursday how this would differ from what the Attorney General’s Office does now in commission rate cases, as it’s tasked with representing consumers at the SCC.

Petersen laid out five proposals in all Thursday, including a pitch he made last year to undo rate freezes that passed the General Assembly in 2015 and may allow Dominion to exceed the profit margin laid out for the company by state regulation. That freeze was pitched as an answer to uncertainty created by Obama-era clean power regulations, but legislators balked at a rollback this year, despite the Trump administration jettisoning those rules.

Petersen said all these proposals will be ready for the 2018 legislative session. He said the donation ban is more important than all the others combined.

Read More – http://bit.ly/2rziVEH