The State Corporation Commission staff has provided an updated version of a table tracking the possible rate impact of various Dominion Energy Virginia cases pending before the commission, most creating or adjusting rate adjustment clauses (RACs). It starts with a baseline of $117.64 for the February monthly cost to that famous 1000-kilowatt hour typical customer, who of course does not exist.
The largest cost increases visible on the horizon are not included.
Some of the cases which are tracked have been decided and some are pending. The table was included in the staff testimony about the proposed demand management programs paid for with Riders C1A and C2A and includes the $0.61 per month increase in them Dominion is requesting.
It reflects slightly lower costs in one rider, Rider R for the Bear Garden power plant, and an estimated $1.06 reduction due to the recent federal income tax rate cut, which is still being litigated. It projects a possible bill of $120.71 by November 1.
Going back to a June 2018 post, when we last explored this table the bill was projected to be above $120 by now, not $117.64. The June version started with a base bill of $114.20, which has grown but not as high as it might have. That $2.54 difference between the projected and actual February amounts probably reflects several adjustments, including at least some SCC decisions that went against the utility and in favor of consumers.
Several lines on the table are unchanged from the older version.
Don’t relax. There are many major costs coming toward consumers which are not part of any pending cases, and thus not yet reflected in the chart. Every one of them results from political decisions by Virginia’s legislators or Governor.
Coal Ash Costs: The table does include a proposed amount for the new Rider E for recovery of current environmental compliance costs, but billions of dollars of additional coal ash remediation costs will start to to accrue this summer and will appear in that Rider E starting in 2021. A previous promise to hold the cost to $5 per month for that typical residential customer has quietly disappeared from the bill.
Regional Greenhouse Gas Initiative: Virginia will enter the RGGI carbon trading exchange with other Northeastern states in 2020, and just how those dollars will be accounted for remains to be determined. It may flow through the fuel factor and the bill impact might not be too large. If captured by the state treasury and used for state spending programs – as many hope – that will produce a substantial increase in that fuel factor.
Grid Transformation: The SCC rejected much of the proposed $1.5 billion first phase of the utility’s proposed upgrades, but the General Assembly created major incentives in the Ratepayer Bill Transformation Act for the utility to back up and try again with revised proposals.
Done right, many of the grid improvements should be advantageous to customers. But they will not be free, and the utility still has the option to recoup them through yet another rate adjustment clause. If not done that way, it will spend excess profit dollars that otherwise might have been returned to ratepayers in the future.
New 2019 Riders: As previously reported, House Bill 2691 allows the utilities to create RACs to harvest ratepayer dollars used to expand into the rural broadband business, and House Bill 1840 will set up a rate adjustment clause to extend speculative transmission lines to empty business parks and industrial sites. Neither has passed yet but they are advancing.
This is a useful scorecard and I hope the SCC will continue to update and release it from time to time.
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