The Appalachian School of Pharmacy… located in Appalachian Power Co. service territory.
by James A. Bacon
In 2012 Dominion Virginia Power donated $10,000 to the Appalachian College of Pharmacy in Buchanan County, far outside the company’s service territory. It so happens that Del. Terry Kilgore, R-Gate City, head of the House Commerce and Labor Committee, has been a salaried fundraiser for the school, according to the Associated Press. It also so happens that Kilgore played an important role ushering legislation through the General Assembly this year that suspends until 2022 biennial reviews of Dominion’s base rates. Of the $10,000 Dominion donated, $4,000 was recouped from Dominion ratepayers, the AP says.
It’s one thing for Dominion shareholders to donate to charitable causes, even if the donation is politically motivated. Dominion should be entitled to the same right to participate in the political process as any business. But it’s quite another thing for the giant utility (and sponsor of Bacon’s Rebellion) to charge such donations to rate payers.
“Why should captive ratepayers, who have no option to get electricity from another company, be compelled to fund the charitable choices of a company?” AP quotes former Attorney General Ken Cuccinelli as asking. “Leave the ratepayers their money, and let them make their own charitable choices.”
We’re not talking about a tremendous amount of money here. According to the AP, Dominion included $1.37 million of donations in the cost of service it charged to customers in 2o11 and 2012. State Corporation Commission staff recently filed testimony saying that Dominion should not be able to pass along $3.3 million in donations from 2013 and 2014. Dominion spokesman David Botkins says the company will file a detailed rebuttal later this month.
Many of those donations may be entirely legitimate, tied at least tangentially to the business of generating, distributing and conserving electric power. I can’t get exercised about the $7,500 donation to the Peninsular Council for Workforce Development, cited in the AP article, even if CEO Matthew James also serves as a Portsmouth delegate to the General Assembly. As a major employer, Dominion has as much a stake in workforce development as any company in Virginia. (Although I would be interested to know if Dominion donated to other workforce councils in its service territory.) And, frankly, from the rate payer perspective, we’re talking chump change here. There are much bigger issues to worry about, like how rapidly to phase in renewable energy sources, where to build electric transmission lines, whether or not to build a nuclear power plant, and so on.
But the controversy isn’t about the impact on ratepayers. It’s about the political clout of the most influential corporation in Virginia politics. Dominion shouldn’t charge ratepayers for actions designed to influence legislation effecting ratepayers.
Katherine Bond, director of public policy for Dominion, told the AP that the company feels it “is important to support the communities in which we do business.” But the Appalachian School of Pharmacy, located in Oakwood, Va., is not a community served by Dominion. The company’s motive in donating the money might have been pure as the driven snow — but no one is going to believe it.
Dominion would do itself a big favor by tightening its guidelines for billing ratepayers. Limiting donations to communities within the company’s service area would be one place to start. If the company doesn’t police itself, legislators might be tempted to draft a law limiting such donations — and those limits could well be stricter than any limits the company would want.
Update: Dominion has issued a response to the AP story. Here’s the meat of it: “Some perspective about the source of funding for those investments is important. In 2014, our company donated $18.5 million to charitable causes; the vast majority of these funds were provided directly by shareholders. In fact, in our latest filing with the Virginia State Corporation Commission (SCC), we stated that only about $740,000 of these donations were supported by rates collected from our Dominion Virginia Power electric customers in the Commonwealth. That’s just 4 percent of the total.”
I have posted the full response in the comments and highlighted it in yellow.
