The legislative logjam over a controversial electric grid modernization program appears to have broken. The much-modified legislation, backed by Governor Ralph Northam and Virginia investor-owned electric utilities, has passed the House of Delegates and state Senate, and in the estimation of Richmond Times-Dispatch reporter Robert Zullo, “could be headed to … Northam’s desk by the end of the week.”
The legislation will enshrine the “investment model” advocated by Dominion Energy Virginia of using rate over-earnings to help pay for building the electric grid of the future, including more solar and wind power, energy efficiency, power-line burial, a pumped-storage facility, a “smart” grid, and hardening against cyber-sabotage and terrorist threats. Opponents say the law could lock in excess utility earnings for years.
Assuming the bills in both houses can be reconciled and enacted into law, the battle between Dominion, Appalachian Power Co. and their detractors won’t be over. The action just moves to the State Corporation Commission. The SCC staff and three judges will hold a series of evidentiary hearings on a long list of proposed investments, and they will balance the broad objectives of affordability, reliability and sustainability when deciding whether to approve the requests. Presumably, they will take into account the declaration of the General Assembly that grid-transformation projects are in the “public interest.”
The SCC judges will have latitude — exactly how much is not clear — to draw their own conclusions. So it very much matters who serves on the commission. And it very much matters who will fill the position to be vacated by Judge James C. Dmitri, who, among the three judges, arguably has been the most critical of the electric utilities.
Yesterday the Senate Commerce and Labor Committee interviewed three candidates to replace Dmitri:
- C. Meade Browder, Jr., assistant attorney general,
- David W. Clarke, a Richmond lobbyist representing gas and insurance companies, and
- Maureen Matsen, legal counsel for Christopher Newport University and a former deputy secretary of natural resources under former Governor Bob McDonnell.
Committee Chair Sen. Frank Wagner, R-Virginia Beach, a long-time friend of the electric utilities, made it clear that he wants to see the SCC get with the program. Wagner accused the commission, reports Zullo, of an inability to “see the big picture” because of a narrow focus on electric rates and consumer costs.
Wagner compared the commission to a short-sighted business owner who can hoard money by failing to invest in his company but “will end up going out of business for failing to keep up.
“They take that myopic approach despite many statements, getting more and more bold, from the General Assembly as to what the policy is for the future of Virginia and ensuring that those investor-owned utilities make the necessary investments for the long-term good of all Virginians,” Wagner said.
The SCC judge candidates, who are appointed by the General Assembly, expressed support for the new direction of electricity regulation.
Said Brouder: “I’m aware of your particular interest in that area. … I think any commissioners would work within the regulatory framework that y’all have laid out.”
Said Clarke: “It’s clear to me that the sense of the General Assembly is that we need to have more investment. Those things don’t come without a price tag on them, no question.”
Said Matsen: The commission “needs to be a broader, wider vision” on how it handles “a tremendously dynamic and exciting time for the energy industry.”