By Steve Haner
If the Virginia General Assembly orders Dominion Energy Virginia to fork over hundreds of millions of dollars in “excess profits” to cover unpaid family utility bills, who is really paying? We all are, of course. Don’t say you were not warned.
That apparently is the latest approach to help folks behind on their bills, as reported in this morning’s Richmond Times-Dispatch by Associated Press. Governor Ralph Northam is proposing a budget amendment to raid the presumed excess cash at Dominion, after legislative efforts to capture it were defeated in the special session.
Legislative manipulation of the regulatory process, bypassing the independent State Corporation Commission, created the opportunity for Virginia’s dominant electric utility to pile up a possible half billion dollars in excess profit. But the money came from every Dominion customer, a large portion of it from the giant industrial consumers. Only a small part came from those now behind on their monthly bills.
Some legislators see your electric bill as just another tax to be spent on their priorities, not yours. Now they want to use it to pay electric bills for customers who have fallen behind due to a recession (again, a recession in part of the government’s making.)
Frankly, a full $500 million might not cover the tab for all the families that have fallen behind on their utility bills after being told they could not be disconnected. It certainly won’t cover the bills for all Virginians, including those who are not on Dominion’s service, and Dominion is the only utility with this particular piggy bank to raid. Will Dominion funds be transferred to other utilities?
It is hard to write calmly about this insanity. That such an idea is even under consideration demonstrates total ignorance of the regulatory realities. This is a taking. If the legislature can tax us through this underhanded method, it is a bad idea that will take deep root. Here is what they are ignoring:
Until Dominion’s books are examined and audited in a full rate review, nobody is sure whether or not there is a surplus of that size. The estimates, including one put out just two weeks ago, are based on a fairly cursory accounting. It could be $500 million, or less or more once that audit is done.
If there is a major surplus, there are three ways to deal with it. One – which Dominion will never agree to – is an actual cut in base rates. Another would be refunds, but based on actual customer usage, not economic stress.
The third – Dominion’s preferred method – would be to spend that surplus on all the Green New Deal wind and solar that the legislature has foolishly ordered up. If that is done, it saves customers money over the next 30 years because there is less money needed for those projects from equity or debt.
None of this is scheduled to be examined until 2021, and then decided about one year from now. The other major power company, Appalachian Power, is undergoing its rate case now. Under the normal course of business, if the SCC were to order refunds from Dominion, they would be showing up on bills in late 2021 or early 2022.
But, of course, the utility and rent payment crisis precipitated by the deep recession is here now. As of June 30, about three months into the moratorium, the unpaid bills had mounted to $184 million, with the peak of the summer cooling season still ahead. Initially the plan was to continue the payment moratorium well into 2021. By then the unpaid tab could approach $1 billion.
Let’s watch, but there is no real reason for Dominion to refuse this idea. It will be made whole. Why would it care whether it pays out $500 million in refunds to everybody later or only to a few now? This way it collects those dollars and spends them internally, instead of their customers getting the money for some other use. As the man said, winning!
And if the $500 million is not invested in the wind or solar projects, that is $500 million more in equity needed to build them – equity subject to massive annual profit margins for decades! The stockholders will cheer, and you will pay.
Leadership in both the State Senate and the House of Delegates turned back bills introduced in the special session to change the rules on the coming Dominion rate review. The folks at Clean Virginia went into a near fit when the House balked on the bill, claiming it would provide $400 million in economic relief, a claim with no basis in reality. There was no guarantee in that bill that $1 would flow back to customers.
Understand this: These same people are behind the Green New Deal remake of Virginia’s economy which will skyrocket the cost of electricity, natural gas and eventually gasoline. They don’t give a tinker’s dam about what it will cost you. Some drink the Kool-Aid and think costs will go down, but the higher prices for energy are inevitable and intentional. Any doubt that they understand that should be dispelled by the plan to create a new electricity welfare program, funded with a tax on all ratepayers.
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