Bacon's Rebellion

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Dominion’s Strange Ploy to Avoid Audits

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Peter Galuszka
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dominion By Peter Galuszka

Dominion Virginia Power appears to be getting its way with strange legislation to freeze its rates and avoid regulatory audits for the next six years.

The state senate will hold hearings today on a bill that would cancel biennial rate reviews by the State Corporation Commission to 2020. Dominion’s rates will be frozen and couldn’t go up or down.

The utility’s reasoning is that it may have to spend a lot to comply with unfinished regulations by the U.S. Environmental Protection Agency that would cut carbon emissions from coal plants by 30 percent by 2030 compared with 2005 levels. Always looking out for its customers, Dominion doesn’t want to stick them with astronomical rate hikes resulting from the EPA rules.

The bill was drafted by Dominion, the state’s largest donor to political campaigns, by Sen. Frank Wagner (R-Virginia Beach) who is the go-to guy for laws favoring energy firms.

In 2004, Wagner sponsored legislation that allowed companies the right to survey land for proposed natural gas pipelines without having to obtain the owner’s permission first. The nettlesome law figures heavily in the current battle by property owners over proposed gas pipelines in the state, notably the $5 billion Atlantic Coast Pipeline in which Dominion is a partner. The pipeline would take gas 550-miles from West Virginia, through Virginia and on into North Carolina. Dominion has sued more than 240 landowners who have refused to grant access. They are challenging the constitutionality of the pipeline law in federal court.

There’s a lot odd about Wagner’s current bill. The first problem is that it would supposedly protect Dominion customers from federal rules that aren’t even final. It is weird that Dominion would use the excuse that it might be socked with huge costs by having to shutter coal-fired plants. Surprise, surprise! Dominion announced several years ago that it would shut down aging coal units in Yorktown and Chesapeake. So, what’s the connection between the new EPA rules and coal-plant closures?

Atty. Gen Mark Herring says that the Wagner bill is a ploy to keep Dominion from having its profits overseen by the SCC because the utility might have a $280 million surplus that ordinarily might have to go back to ratepayers. After  a 2011 SCC rate review, Dominion had to pay back $78 million to customers.

The other oddity is why Dominion and Wagner are suddenly so scared about exploding costs brought on by the EPA. After all, prices for natural gas, which fuel some of Dominion’s units and is  less polluting than coal, are very low – so low that the fracking boom that released a flood of cheap gas is slowing down considerably.

Environmental groups say that the Wagner bill is a gift for Dominion. The senator has received more than $43,000 in donations from the utility over the years.

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6 responses to “Dominion’s Strange Ploy to Avoid Audits”

  1. TBill Avatar
    TBill

    I agree the proposed bill sounds questionable. However, I do see a potential problem with EPA regs forcing Virginia to reduce CO2 when we are already relatively low CO2 (only 20% coal in-state I believe is the EPA 2012 number). But, on the surface, this bill does not seem like the correct way to address perceived EPA intrusion into VA state energy policy.

  2. larryg Avatar
    larryg

    This is one of those things where Dominion and the SCC are way ahead of the public in what is basically an inside-baseball strategy that the public is largely clueless about – again.

    but I do not understand the obsession with the EPA and it’s regs and it walks and talks a lot like the Medicaid Expansion issue – i.e. there is some aspect of ideology because the EPA regs are about more than just carbon, soot and mercury will also be cut – and there are real adverse impacts to people – the elderly and children from the soot and particulates including 3000-6000 deaths..

    98% of the worlds scientists believe that carbon dioxide is a problem just as they did with CFCs and the ozone hole.

    the folks against – when pushed for their view – assert that the worldwide agreement among scientists – constitutes a conspiracy.

    and then it gets even more bizarre because the supposed motive of the conspiracy is to get more funds for research.

    It’s astounding in the internet age of knowledge that we have a substantial number of people who not only do not believes the scientists on carbon but on vaccinations, genetic food, the age of the earth, etc – a luddite-like mindset.

    the proverbial “cone of uncertainty” associated with hurricane projections is now viewed as – proof that science cannot be trusted as if science has to be 100% correct, 100% of the time – or it indicates a problem.

    the biggest potential “downside” of being less than 100% correct about future carbon – is less pollution, less deaths from pollution and money saved by conservation measures like LED and Solar.

    yet – all of this is thrown off to the side to focus on one thing – the EPA.

    and the irony is – this is the SAME EPA that people want to keep kepone out of rivers and nutrients out of the Chesapeake Bay.

    We have this split personality these days about pollution. Some of it we want the EPA to stop .. and some of it – we feel is not the legitimate business of the EPA – .. it’s a bit looney.

  3. TBill Avatar
    TBill

    Here is another editorial on the subject… I like this editorial because it gives some facts about EPA’s CO2 targets for Virginia, which seem overly strict vs. MD and WV:

    http://www.fredericksburg.com/opinion/editorials/editorial-dominion-makes-power-play/article_834bcef7-a19c-502f-bc35-c20b0daa9ccd.html

    1. larryg Avatar
      larryg

      here’s the problem Tbill.

      if you don’t have the same rules for all coal plants then the EPA will get sued for discriminatory rules.

      They don’t see it as states having boundaries.

      they see it as certain kinds of coal plants – older ones with high pollution levels – as either needing to be retired or upgraded.

      and if Virginia is given a waiver what happens to the plants in WVA?

      Don’t you think the basic argument is a bit disingenuous when they basically ignore the issue about the coal plants regardless of what state they are in and the fact that putting different rules on the same kinds of coal plants in different states would ultimately lead to legal challenges regarding discriminatory treatment?

      Serious question. How do you feel about that?

      1. TBill Avatar
        TBill

        Larry I have as many concerns as you if not more with conventional coal fired combustion. I don’t like grandfathering too much either.

        I am now thinking there must be some numerical errors in the Fredericksburg Press article above, however, I still think it helps immensely to show the EPA-proposed VA CO2 target numbers (after any corrections) benchmarked versus MD and WV.

        1. larryg Avatar
          larryg

          agreed. but is the EPA talking about States or coal plants?

          I just don’t see how they can do it by state.

          it seems to me that they are going after the older, more polluting plants no matter where they are.

          How would you close plants in WVA and not close plants exactly like them just over the border in Va?

          have I got this all confused? it just seems to me that this is about coal plants not states.

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