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.
But the law’s sponsor, Sen. Frank Wagner, said the law has worked properly and is still needed because of continued uncertainty over carbon regulations. He also noted that overall electric bills have gone down thanks to lower fuel prices, and said the 2015 law has also helped spur solar energy development in Virginia.
Dominion Senior Vice President Thomas Wohlfarth disputed some of the SCC’s analysis and said the company’s rates weren’t too high given the potential costs the company could have to eat during a rate review freeze, including from potential hurricanes and coal ash clean-up costs.
“There’s always risks that we’re facing,” he said.
Dominion provides power for about two-thirds of the state, while the state’s other large regulated utility, Appalachian Power, provides electricity for about 15 percent of the state. Smaller cooperatives cover the rest.
Appalachian had overearnings of more than $20 million in 2016, according to report.