Dominion electric rate freeze bill rolling in Richmond

Dominion promises rate cuts, freeze, if pesky state reviews are shelved.

Dominion Virginia Power's bid to shield itself from routine state rate reviews kept chugging toward passage Monday, with a litany of business groups and charities lined up for support.

Senate Bill 1349 would exempt Dominion from biennial rate reviews for five years. Western Virginia power company Appalachian Power, a late addition to the bill, would skip reviews for four years.

That would freeze through 2022 the base rates that make up most of Dominion's charges, though fuel surcharges and other tack-on fees could still go up and down. Dominion said Monday that, in concert with this bill, it would move quickly to cut fuel charges on residential bills 5 percent, and 10 percent for commercial customers.

The company said it needs the broader freeze to deal with pending federal regulations on carbon output. Critics said that was just a red herring. These state reviews are used to assess how much profit the regulated utility brings in, and when profits get too high, the state orders rate cuts and refunds.

"This is really not a freeze, it's a floor," Glen Besa, the Sierra Club's Virginia director, told legislators Monday.

A number of environmental groups stood against the legislation, as did the Attorney General Office's consumer protection division.

"The bottom line is who is going to regulate the utility?" Senior Assistant Attorney General Meade Browder Jr. asked. "Will it be the (State Corporation Commission), the General Assembly or the utilities themselves?"

Gov. Terry McAuliffe's administration wouldn't put itself for or against the bill, despite multiple attempts from a Republican state senator to nail Secretary of Commerce Maurice Jones to one position or another Monday.

"We have concerns," Jones said. "We hope we're close to getting our concerns addressed."

The Senate's Commerce and Labor Committee moved the bill forward on a 14-1 vote after nearly two hours of testimony and debate. Dominion lined up a number of business groups, including The Virginia Chamber of Commerce, the Hispanic Chamber and the Virginia Manufacturers Association, to argue for the stability in frozen rates.

A number of charities and social groups backed the plan, too, including the Virginia State Conference NAACP and the American Red Cross of Virginia.

"One of the few bills I've heard this week that takes into consideration the business community and the low and moderate income communities," said Rodney Thomas, a lobbyist for the NAACP.

Some of the largest electricity users, though, are against the bill. Ed Petrini, an attorney who represents a number of these businesses, said the General Assembly should let the SCC do its job, not "blind" it with legislation.

The SCC's last review found Dominion was over-earning by some $280 million. The freeze would "unnecessarily cement into place those over earnings," according to Brian Gordon, who represents the Apartment and Office Building Association of Metropolitan Washington, another large group of electricity users.

Dominion disputes the over-earnings figure, saying the SCC relied on pie-in-the-sky assumptions to reach it. Company officials pitched the freeze as good for rate payers, not the company itself, and said the bill would shift the feared cost of closing coal-fired plants to comply with the coming U.S. Environmental Protection Agency mandates onto shareholders.

"That's the whole purpose of this," said Dan Weekley, Dominion's vice president of corporate affairs.

Weekley predicted rate increases "between 25 and 30 percent" without the bill in place.

Fain can be reached by phone at 757-525-1759.

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