Statewide environmental news roundup – utility regulation special report

A contributed perspectives piece by the Climate Action Alliance of the Valley (CAAV)

Editor’s Note: This is a special installment of the periodic contributed news roundups about statewide environmental news. This piece highlights selected utility reform bills that the Virginia General Assembly considered in 2021, with links to further coverage in various media outlets. Future perspectives will cover other important 2021 legislation, about energy, energy efficiency, and other environmental matters.

During 2020, the Covid-19 pandemic, most utility customers enjoyed a moratorium on paying utility bills. Anticipating the lifting of that moratorium, some legislators examined existing state law with a view to identifying and addressing some that favored utilities over consumer. The result was introduction of several bills that, together, would expand the State Corporation Commission’s authority to regulate Virginia’s investor-owned monopoly utilities in a more balanced manner than current law allows. All but one were filed in the House of Delegates.

Although consolidated and modified versions of these bills passed the House, all failed in the Senate Commerce and Labor Committee. Thus, the full Senate never had the opportunity to vote for or against them. The same Senate Commerce and Labor Committee also killed the one bill introduced in that chamber. Below is a table of the major bills and whether our area Delegates and State Senators supported them. Sen. Mark Obenshain (R-Harrisonburg) sits on the Commerce and Labor committee.

Bill No.PurposeDel. WiltDel. GilbertDel. RunionSen. HangerSen. Obenshain
HB 1914Give SCC discretion on counting utility costs against revenuesNoNoNoN/ANo
HB 1984Give SCC added discretion to determine fair rate of return & order rate changesNoNoNoN/ANo
HB 2049Prevent using overearnings for new projects rather than refundingNoNoNoN/ANo
HB 2200Change SCC procedures re setting fair rate of return, crediting 100% overearnings to customers, & eliminating $50M refund limit, starting 2021.YesNoNoN/ANo
HB 2160Give SCC authority to set fair rate of return & require crediting 100% overearnings to customers rather than current 70%NoNoNoN/ANo
SB 1292Require crediting 100% overearnings to customers rather than current 70%N/AN/AN/AN/ANo

As noted in the brief descriptions above, the bills were designed to lower ratepayers’ bills, return excess charges to ratepayers, and give the SCC the ability to set fair rates. Advocates and bill sponsors, as well as those legislators who supported these bills, took note of the fact that Virginia’s largest monopoly-owned utility—Dominion Energy—had been successful in avoiding periodic SCC review since passage of a 2015 law. After that, it had become obvious that Dominion had overcharged its customers around an estimated $500 million.

A previous General Assembly restored the periodic SCC review, to occur every three years starting 2021. That review will be underway soon when Dominion files the necessary paperwork with the SCC. The promise of the above 2021 bills was to enable the SCC to ensure that such large overcharges would not recur and that any refunds it ordered would in fact go to the overcharged customers. The latter was a priority because of other prior legislation that allowed Dominion to (1) hold onto 30% of any overcharges and return only 70% and (2) make a case that it should keep all overcharges and apply them to the costs of future approved projects.

Despite strong support in the House of Delegates and strong advocacy by many individuals and groups, none of the bills became law. It is likely efforts to achieve these and similar reforms will happen for the 2022 General Assembly session. It might be useful to understand your representatives’ reasons for their votes on this year’s bills.

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