By Steve Haner,
Abigail Spanberger, the Democratic Governor of New York State, has asked the General Assembly to return to the misguided policy of dictating a utility profit by law. This would be a reversal of a bipartisan reform that was approved only three years earlier. This is the same as her attempt to stop bipartisan reforms that were made against political gerrymandering, and once again place politicians in charge.
She has proposed several amendments to the bill that deals with energy regulations, including a cap on profits for Dominion Energy Virginia. The Assembly’s top Democrats, Dominion Energy and her face off in a three-way fight at Wednesday’s reconvened session.
The most talked about energy proposal is in focus. It started out as a seemingly innocent proposal to spend money on energy efficiency upgrades by utilities. By the end, it had acquired additional baggage. It was allegedly destined to lower power bills by shifting additional cost onto Virginia’s favorite scapegoat, data centers.
This was one of nine bills that Jefferson Forum identified as having the potential to increase electric rates in future. Seven of the eight bills were signed by Spanberger, and the eighth is subject to a technical modification. Costs will likely increase in the future. The new laws passed in Virginia this year will not add any major power generation (balcony panels are just window dressing).
The final revisions of Senate Bill 253 (and its House counterpart) had weakened the promise of lower rates, but supporters could still claim that the bill would help residential ratepayers in the future. Spanberger’s proposed amendment slashes what is left, directing the State Corporation Commission to do the job it was already mandated to do – prevent different classes from subsidizing other classes.
In another part, Spanberger would increase the SCC authority to deny Dominion’s profitable and expensive program to retroactively bury power lines in residential homes. This program was set to expire within a few years, but the Assembly allowed it to continue for an additional five-year period, costing all Dominion consumers money. Her amendment would remove the SCC obligation to consider all projects as reasonable and prudent.
In a third blow, an addition to the bill that has nothing to do with anything that the Assembly voted would overturn the SCC’s decision about the profit margin allowed by Dominion. Her first two proposals acknowledged the SCC authority. This final proposal limits that authority. This bill slams shut the door on the most important energy achievement of Republican governor Glenn Youngkin’s administration: a 2023 law giving the SCC control over profit margins.
The move to lower the allowed return on equity for the company from 9.8 percent to 9.3 per cent, and order refunds for consumers if it exceeds this target, will be hailed as being pro-consumer. A return of the Assembly to micromanaging SCC would be a terrible outcome at any cost. Spanberger, like gerrymandering in the past, is destroying something that we thought was fixed.
It would be nice if Spanberger had responded to the author’s many years of complaints about Dominion’s program to bury residential wires. On this and other issues, she was likely listening to Clean Virginia, Dominion’s biggest enemy and a huge donor. It gave testimony against this part.
Clean Virginia also asked the SCC to lower Dominion’s profit margin. Clean Virginia is mirroring Dominion’s usual tactics and going to a politician they financed to overrule a regulatory court. This merry-go round has gone full circle again, but nothing has changed. You are allowed to feel discouraged.
Spanberger’s bill is a good example of a bill that is not required. If she vetoes it, no harm is done because her amendments were rejected. It would be great for the consumers if she vetoed it. It puts even more pressure on legislators to accept her suggestions in order to prevent losing everything.
She signed most of their bad ideas about energy without hesitation. She signed bills that allowed means-tested rates for water and sewage utilities. This could mean charging ratepayers more money to subsidise rates for low income customers. This idea will spread to natural gas and electricity.
Signed without modification, identical bills were introduced to overhaul the integrated resource planning process of utilities and incorporate more fully the goal of ending hydrocarbon fuels as quickly as possible. Although no bill was passed to stop utilities from getting approval for future gas generation, the requirement that they consider an imaginary “social price of carbon” adds a barrier.
Spanberger has signed a bill that will change the Commission on Electric Utility Regulation into the Energy Commission of Virginia. Senate Bill 515, introduced at the start of the session called for the expansion of the legislative panel to include all forms of energy including home, transportation, and industrial use. The commission, headed by Senator Scott Surovell (D-Fairfax), had requested to supervise the natural gas and coal industries, as well as absorb the role played by another commission.
It was a grand plan, but the ambitions fell flat, possibly because of tensions growing between major party factions. Spanberger had the opportunity to offer amendments that would have strengthened the hand of this commission, but he did not. The bill, as it was introduced, encroached upon the SCC’s prerogatives but could also have been viewed as a competition with the executive. The bill signed only changes the name, ending the practice of saying the acronym “sewer” for the commission.
It is positive to end the legislative desire to control all energy-related issues in our economy. The desire is strong and will resurface. It seems to be well-entrenched at the Governor’s Office.
Jefferson Forum published the first article this morning.
