Virginia’s two big electric companies will escape state regulation of their base rates for up to eight years under a bill which caught opponents by surprise – a measure just approved by the Virginia House. Its sponsor promised a rate freeze for consumers, but your bill could still be going up.
Because Dominion and Appalachian Power are monopolies, the state limits how much money they can make – ordering rate reductions when they’re earning too much, and allowing rate increases to cover certain expenses. Under a bill passed by the General Assembly, that oversight will end for up to eight years.
Without the change, sponsor Frank Wagner said consumers would be stuck with much higher bills as the utilities close coal fired power plants to comply with new environmental regulations.
“The rate-payers would have to pay for the new generation that was taken down. And that new generation may take the form of natural gas or nuclear, very expensive options either one.”
In fact, his measure freezes only one part of your electric bill – the base, which accounts for about half of what you pay. Customers will still have to pay more if the utilities build new plants or must pay more for their fuel.
Wagner insisted the bill offers certainty in a time of uncertainty and contains other benefits for customers.
"As part of the 1349 bill, I was able to negotiate a rate decrease. 5% reduction in rates for the homeowners for at least the immediate next eighteen months," he said.
Actually, Dominion was expected to ask for a rate reduction of about five per cent next week -- based on the fact that it’s been paying less for fuel. But wait, said Wagner, there’s more.
“Now we've also added 500 megawatts of solar power as a means to start to transgress and change the way that we generate electricity. I think Sierra Club was opposed to it but now they are neutral on the bill.”
The Sierra Club admitted it had withdrawn objections but characterized the measure as a “bad, utility sponsored bill.”
Wagner claimed his measure enjoyed support from large industrial customers, but attorney Ed Petrini, who represents many of them, said that wasn’t so.
“The problem with freezing the base rates is that those rates have been found to be too high. Customers would miss out on rate refunds and rate reductions.”
In spite of such objections, most lawmakers voted for the bill and Dominion backed it. The company is this state’s largest corporate campaign contributor – giving more than a million dollars over the last 12 years to those 30 members of the Senate Commerce Committee who voted for it.
The measure now goes to Governor McAuliffe who could veto it or call for amendments. In his last campaign, he accepted $160,000 from Dominion.
