Proposed reforms of Virginia’s electric utilities in the House of Delegates center around companies’ revenues, which have recently surpassed amounts authorized by the state.
There are two large for-profit electric utilities in Virginia. Dominion Energy, the largest utility, serves 2.45 million customers in central and eastern Virginia, while Appalachian Power serves 530,000 customers in southwest Virginia. Dominion Energy earned nearly $503 million more than it's authorized to since 2017 and will submit an important regulatory filing around its books in March.
Typically utilities that overearn will refund customers, but Virginia law allows them to keep a portion of their extra profits, and use surplus revenue in capital projects. The State Corporation Commission calculated that Dominion could keep 110.8 million of its excess revenue and refund $256.8 million. But Dominion said that $199.5 million worth of wind and distribution grid transformation projects were eligible for such an offset, according to a SCC report.
Delegate Jeffrey Bourne (D-Richmond) has proposed a bill to eliminate such credits.
In a subcommittee meeting Monday morning, he argued that these investments, called customer credit reinvestment offsets, or CCROs, mean that utilities get an instant payback rather than paying for an investment over time through normal rate payments.
“If we continue to allow the CCROs to be available we are all but guaranteeing customers will not get refunds,” he said.
Currently, the SCC has to approve such offsets.
The economic effects of the pandemic has put extra pressure on Virginians, including on their ability to pay electric bills. Last year regulators estimated that electric utilities were owed $137 million in overdue bills.
This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.