Tuesday , February 13, 2018 - 1:00 PM
(c) 2018, The Washington Post.
RICHMOND, Va. - The House of Delegates on Tuesday passed a sweeping overhaul of the way Virginia regulates its electric utilities, with one last-minute change aimed at fixing what some say is a significant flaw of the legislation.
An amendment offered by Del. David Toscano, D-Charlottesville, would prohibit utility companies from charging ratepayers twice for expensive projects to upgrade the grid and invest in renewable energy.
The change is intended to prevent what some called a “double dip” component of the original legislation, which lets utilities invest excess profits in new projects instead of returning money to ratepayers. According to critics, the original bill would let utilities both keep the excess profits and build the cost of new projects into base rates.
Dominion Energy, the state’s biggest utility and most generous corporate campaign donor, helped write the legislation and denies that it permits double-dipping. But Dominion opposed the Toscano amendment, so its passage is a measure of changing attitudes in the General Assembly towards the state’s largest utility.
A slate of new Democrats erased a wide Republican majority in the House of Delegates in November in part on promises to shake up the legislature’s cozy relationship with Dominion, which is Virginia’s biggest corporate political donor. The GOP maintains a 51-49 majority, but the utility regulation bill is so controversial that opposition crosses party lines.
The Toscano amendment initially passed on a 55-41 vote with two abstentions on Monday. Then Republicans called it back up for a re-vote when it passed 96-1, with two abstentions.
The amended bill passed the full House on Tuesday by a vote of 63-35 with two abstentions. Despite having amended the bill the day before, Toscano voted against it on Tuesday.
“The amendment passed yesterday made the bill much better, but substantial problems remain to be fixed,” Toscano said via email. He added that he remains concerned that the bill removes layers of state oversight and potentially slows the ability of consumers to get rebates for overpayment. “I am hopeful that these problems will be fixed during the next step of this process,” he said.
When the state Senate passed its version last week, it rejected an amendment to ban double-dipping, so the two sides will have to reconcile their differences before the session wraps up in mid-March. Gov. Ralph Northam (D) helped broker the legislation and has said he supports the version that passed the Senate.
Sen. Chap Petersen, D-Fairfax City, has been a leading critic of Dominion since the General Assembly passed a rate freeze in 2015. That action was based on the company’s claim that the Obama administration’s Clean Power Plan would create uncertainty and open-ended expenses. But the costs never materialized and the Trump administration has killed the CPP. Virginia’s State Corporation Commission estimates that Dominion has reaped hundreds of millions in excess profits during the freeze.
Petersen said he was surprised the House agreed to the Toscano amendment, but that it doesn’t get at the fundamental problem he sees in the legislation: That it continues to prevent the SCC from overseeing rates and lets the utility spend its excess on new projects.
“I congratulate the House for winning the battle, but if you take away the SCC’s jurisdiction you’re losing the war,” Petersen said.
Former state Attorney General Ken Cuccinelli (R) wrote to members of the General Assembly Tuesday urging them to oppose the legislation, saying they were being played by Dominion.
As evidence, he cited a recent analyst letter from UBS investment bank that was upbeat on Dominion stock because of the expected action from the Virginia legislature. The UBS note praised Dominion as being “adept at navigating VA politics” and added 5 percent to the expected value of its business in expectation of the General Assembly passing a favorable regulatory overhaul.
What Wall Street is saying, Cuccinelli told the lawmakers, is that Virginia is easy. “To use a dating analogy,” Cuccinelli wrote, “if Virginia were dating utilities, her name and phone number would be on the boardroom wall of every utility in the Commonwealth under phrases like ‘for a good time call. . . .‘”
Sen. Frank Wagner, R-Virginia Beach, who sponsored the Senate version along with Sen. Dick Saslaw, D-Fairfax, shrugged off the House’s amendment. What’s more significant, he said, is that the House’s overall approval of the bill is an endorsement of its basic concept - that the state should provide a $200 million funding stream so Dominion can invest in an improved grid and more renewable energy.
“The House has endorsed everything in the bill. The Senate has endorsed everything in the bill. . . .We’re arguing now about how to pay for it,” Wagner said.
House Majority Leader Todd Gilbert, R-Shenandoah, initially opposed the Toscano amendment about double dipping, but switched and voted in favor of it when the matter came up a second time. “I think it’s a legitimate enough concern that we should make sure it’s fixed,” he said.
Some environmental and consumer groups, such as the League of Conservation Voters and the Natural Resources Defense Council, have come to support the legislation because it makes renewable energy a priority.
But others say Toscano’s amendment does little to fix the legislation. They say it fails to return enough money to ratepayers, takes away the SCC’s oversight and gives Dominion a blank check for a host of projects - in particular, designating a pool of money for burying powerlines around the state.
“The bill that passed today contains a $50 billion giveaway to Dominion to bury power lines using our money without government oversight,” said Tom Cormons of Appalachian Voices. “We commend the delegates who have sided with ratepayers as they work to improve this deeply flawed legislation. Barring significant changes, we hope they will continue to stand firm in opposition as the process moves forward.”
For its part, Dominion was cautious. “First, we are pleased to see the bill has passed the House of Delegates,” spokesman David Botkins said. “We are still studying the effects of the Toscano amendment.”
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