Critics are furious that Dominion Energy Virginia and Appalachian Power Co. won’t be returning all of their excess profits to rate payers, but this year Virginians will enjoy modest rate reductions nonetheless.
First, the two power companies will return savings made possible by the federal 2017 Tax Cuts and Jobs Act tax reductions — $125 million from Dominion and $50 million from Apco, the State Corporation Commission (SCC) announced yesterday. The rate cut will be effective July 1.
Second, Dominion will issue a one-time $133 million refund to customers, also effective July 1, in accordance with the state’s Grid Transformation and Security Act of 2018. Dominion will issue a one-time, $67 million refund next year.
Although no authoritative accounting has been done, the refunds are likely to fall considerably short of what Dominion earned in excess of normally allowable earnings during the three years of the 2015 rate freeze. Instead, under the new law, Dominion will reinvest its over-earnings in renewable energy projects and upgrades to the electric grid.
Bacon’s bottom line: The Grid Transformation Act was highly controversial and hotly contested. I hope it’s somebody’s job to track the costs and benefits of the legislation. Here at a minimum is what the public needs to know: (1) What are the over-earnings each year, and how will Dominion invest them? (2) What is the expected payback of those projects, either in lower costs, greener energy, or improved reliability? and (3) what is the actual payback of those investments?
