Dominion is asking state regulators for permission to make more money. Members of the State Corporation Commission heard the case in Richmond Tuesday.
Because Dominion is a monopoly, it’s regulated by the state. And the state decides what a fair profit margin is for the company.
At a hearing Tuesday, Dominion managers argued the company should be able to make more, in part because other utilities do. Dominion is requesting their current rate of return on equity, 9.2-percent, be raised to 10.75-percent
“The fact of the matter is the company’s peers in the southeast are earning more,” said attorney Joe Reid to members of the SCC.
But according to a recent report, Dominion’s profits already exceed what’s allowed. A SCC report released two weeks ago said the utility earned $277 million more in profits than legally allowed. A new law allows the company to invest that money into infrastructure, rather than return it to customers.
Brennan Gilmore with Clean Virginia says this process isn’t new.
“Every few years Dominion comes in and says ‘We must have this higher rate, we must keep more profits. We must take more of customer’s money.’ And then what happens? They continue to be extremely profitable making way more than they’re allowed to for the next two years,” he says.
The routine process of setting Dominion's acceptable return on equity is getting increased scrutiny, as the energy company has come under fire in recent years for its influence in Virginia politics.
Lawyers for Virginia’s Attorney General, the US Navy, the Virginia Poverty Law Center and Walmart all spoke Tuesday against Dominion’s push for a higher profit level.
A decision from the SCC could take weeks.