Welcome to the sixth week of the Our Common Agenda Education Series, featuring the Utility Reform chapter. In this week’s blog post, we will be highlighting our “Reforming Electric Utility Regulation for an Affordable Clean Energy Transition” policy paper, and the current advocacy to ensure fair utility rates for Dominion Energy customers. Follow the buttons below to read the rest of our utility reform policy recommendations in Our Common Agenda:
Why do we need electric utility reform in Virginia?
The current laws regulating Virginia’s electric utility monopolies restrict the ability to manage a clean energy transition that is both effective at combating climate change and affordable for Virginians. The State Corporation Commission (SCC) is responsible for keeping electricity prices fair and reasonable, but current law restrictions, including an arbitrary cap on rate reduction and constraints to address key accounting matters, have limited the SCC’s ability to protect Virginians from excessive energy bills.
Dominion Energy’s triennial rate case is currently underway. The legal proceedings marks the first time since 2015 that the State Corporation Commission (SCC) will fully review and potentially adjust what Virginians pay for electricity.
After overcharging customers by hundreds of millions for years, Dominion energy is asking for a significant profit increase, from 9.2% to 10.8%, which could raise customers’ bills if approved. Many of Dominion’s fossil-fuel energy projects have failed in recent years, and therefore wasted ratepayer’s money. Now, Dominion Energy is requesting an unjustified profit increase, making the clean energy transition seem more expensive even though clean energy prices fall every day.
To make matters worse, Dominion Energy virtually regulates itself through extensive lobbying for higher rates while using their overcharges to reward legislators for favorable legislation for the utility company. The result? Dominion pockets hundreds of millions that it has overcharged Virginians and then turns around and asks regulators for even more of our money. The self-regulation and self-dealing must end.
Virginians already pay more than they should for electricity. When families cannot afford their electricity bill, it can quickly become a matter of life and death in the midst of a heat wave or deep freeze.
Wait…What is a Rate Case Exactly?
Through a regulatory process called a triennial review, also known as a rate case, the State Corporation Commission determines:
- If and by how much the utility monopoly has overcharged customers.
- If refunds are due to customers.
- The amount of profit Dominion should earn in future years.
- If there is going to be a rate increase or decrease.
SCC staff say that Dominion Energy has overcharged customers by $1.1 billion since 2017. Multiple stakeholders – including the Office of the Attorney General, the U.S. Navy, Walmart, the Apartment and Office Building Association of Metropolitan Washington, and low-income organizations, to name a few – all challenged Dominion’s requests for a higher profit, which would charge customers additional billions of dollars, as part of the rate case proceedings.
Following the rate case testimony, the Office of the Attorney General and SCC staff recommend a base rate decrease of $50 million. The SCC emphasized that the rate decrease would be $212 million if not for a Dominion-backed law that caps the maximum decrease at only $50 million.
A Clean Virginia press release notes that Dominion will respond to the SCC staff recommendations next month, and the SCC will issue a final ruling on the rate case early next year after more testimony and public hearings.
How can I advocate for Electric Utility Reform?
There is still time to voice your disapproval of an unjust rate increase: sign the petition to Dominion Energy’s primary regulator, the Virginia State Corporation Commission. The petition asks the agency to DENY Dominion Energy’s request for an unjust increase in profit that could cost Virginians billions in additional charges. The deadline to sign the petition is October 22nd.
You can also publicly testify in the evidentiary hearing to the State Corporation Commission by registering with your name and phone number until October 20th here (case number PUR-2021-00058).
The SCC encourages public participation in all cases, including all ratepayers. Because of its wide-ranging regulatory authority, SCC decisions often impact residents of the Commonwealth of Virginia. All hearings are conducted by the Commissioners or a hearing examiner, and are always transcribed by a court reporter. For more information on participating in Virginia’s SCC Cases, visit their guide here.
Reforming electric utility regulation doesn’t stop with Dominion’s rate case. Read our policy recommendations for electric utility regulation below:
Our Electric Utility Reform Policy Recommendations
- Eliminate existing restrictions on the SCC to set future fair electricity rates using traditional cost-of-service methods. The SCC should be able to decrease rates when the current ones are likely to generate revenues above the authorized profit.
- Remove all limitations on the SCC’s ability to set utilities authorized rates of return or profit, according to market conditions.
- Authorize the SCC to terminate separate riders and opt to roll costs into base rates, if in the best interests of ratepayers. These riders, called Rate Adjustment Clauses, exempt utilities from risks associated with investments, placing disproportionate risk on customers.
Thank you to our Partners at Clean Virginia, Appalachian Voices, Southern Environmental Law Center, and Climate Action Alliance of the Valley for your continued advocacy on utility regulation!