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Delegates Call for Utility Rate Reform


State lawmakers hoping to reform the way utilities work in Virginia suffered a defeat in the General Assembly this week, but they’re hoping for success next week when a package of bills will come up for consideration.

There are 60 public utilities in Virginia – monopoly companies regulated by the state, and many make campaign contributions to lawmakers.  Critics say that’s a conflict of interest, but this week a Senate Committee voted not to ban those donations.  Among those opposing the bill, Lynchburg-area Republican Mark Peake.

“It’s a freedom of speech issue," he says. "The good thing is, in Virginia you know who’s giving people money.”  

Next week, lawmakers will consider six other bills designed to restore the power of the state’s corporation commission – the body that’s supposed to regulate utilities.

“What we’ve done over the last decade and a half in the general assembly is to handcuff the SCC from using that authority in lots of little ways that pile on over charges and pass on profits to the utilities,” says Charlottesville Delegate Sally Hudson, a Democrat who pushed for passage of the Clean Economy Act in the last session. That  bill promotes solar arrays and wind farms. Hudson says proponents knew those changes could be very expensive for consumers.

Credit Sally Hudson
Charlottesville Delegate Sally Hudson is one of six lawmakers who've introduced utility rate reform legislation.

“A lot of us who supported that bill despite its weaknesses did so because we understand that the urgency of climate change required that we start moving on massive clean energy investments, but we promised that we would come back this year and do right by ratepayers, and so that’s the project that we’re tackling with these bills.”

Right now, for example, customers are on the hook for construction of the nation’s largest offshore wind farm – a situation that unfairly burdens consumers according to James Van Ostrand, director of the Center for Energy and Sustainable Development at West Virginia University.

“The utility is not bearing the usual risk in terms of managing costs – making sure that the electricity is procured at a reasonable price, because the legislation actually has the price in there, and as long as it comes in under that, these costs are deemed to be prudent and reasonable.  That’s very unusual." 

Democrats Jay Jones from Norfolk and Kathy Tran from Springfield have introduced bills that would ensure full refunds for customers if they’re overcharged by Dominion – the company building the wind farm.  Jones says the utility’s first responsibility is to shareholders but his obligation is to consumers. 

“I do believe that Dominion has over-earned by several billion dollars over the last decade.  That money belongs in the pocket of the consumer," he says. "We will try to have something that’s going to put people in a position where – one – you get your money back that you’re owed, and – two – we’re setting ourselves up for fair, transparent rate review processes.” 

Dominion declined to be interviewed for this story, but spokesman Rayhan Daudani provided this statement.

“Dominion Energy Virginia customers pay rates that are more than ten percent below the national average and receive excellent service from increasingly clean energy sources.”

Delegate Hudson says that may be true, but rates are only one part of a customer’s bill.

“There are lots of features in the state code that allow Dominion to tack on additional charges above and beyond the rate that they charge consumers.”

Still reformers face an uphill fight.  When Charlottesville hedge fund manager Michael Bills offered just over $1 million to candidates who would refuse campaign contributions from Dominion, only 41 of 100 delegates and 10 of 41 senators agreed.  The Virginia Public Access Project reports Dominion is still the state’s top donor at more than $1.3 million.  Appalachian Power gave over $137,000 for the last campaign cycle.  

Editor's note:  After this story was broadcast, Clean Virginia sent this clarification:  Michael Bills' giving goes through Clean Virginia Fund, Clean Virginia’s Political Action Committee. We will donate $2,500 and $5,000 a year to House Delegate or State Senator candidates or incumbents, respectively, if they refuse contributions from Virginia’s regulated utility monopolies (i.e., Dominion Energy and Appalachian Power Company) and their employed registered lobbyists and do not own stock in those corporations. In addition, we fund "champions" on issues of clean energy and clean government for significantly more. In total, this has meant that since our founding in 2018, Bills individually and through the Clean Virginia Fund has contributed $3.1 million to General Assembly and statewide candidates. 

Sandy Hausman is Radio IQ's Charlottesville Bureau Chief