Electric utility Dominion flexes political muscles in Virginia

RICHMOND, Va. (AP) — Virginia's 2015 legislative session was a good one for energy giant Dominion Resources Inc., the state's most politically influential company.

Legislation it wanted passed, passed. Bills it didn't like did not.

Employing a small army of lobbyists with deep ties to lawmakers in both parties, Dominion dominated debate in number of different areas this session— from property rights to climate change — and guided through changes to the state's electric regulation policy whose long-term impacts aren't clear.

"Admittedly I'd say they did have a good year, but time will tell," said Republican Del. Terry Kilgore, who heads the powerful House Commerce and Labor Committee and — like many lawmakers — counts Dominion as one of his biggest campaign donors.

"I think the consumer got a good deal, too," he added.

Critics of Dominion-backed legislation said the company's interests were put first this session over those of its customers.

"Nobody does it better," said Alexandria Democrat Sen. Adam Ebbin of Dominion's lobbying efforts. "Unfortunately consumers don't have full-time, highly paid lobbyists."

The centerpiece of Dominion's legislative package was a bill sponsored by Virginia Beach Republican Sen. Frank Wagner that locks current base rates into place for at least seven years by exempting the company from regular rate reviews by the State Corporation Commission.

Democratic Gov. Terry McAuliffe signed the bill into law on Tuesday after it sailed through both the House and Senate. Base rates make up the majority of a customer's bill.

Dominion said the new law provides stability for both the company and its customers and insulates ratepayers against potentially higher rates due to proposed federal carbon emission rules or natural disasters.

Lawmakers in both parties are concerned that pending rules from the U.S. Environmental Protection Agency's Clean Power Plan will be unduly burdensome for Virginia, and Dominion argued that the rate stability offered through Wagner's bill will help prevent the costly premature closings of several coal-fired power plants.

But opponents said the legislation was the latest in Dominion's multi-year effort at using the General Assembly to weaken the SCC's ratemaking oversight and lessen the chance of lower rates and customer refunds.

Dominion had to give customers refunds after the 2011 rate review and the SCC found in its most recent review that the company's base rates are currently designed to provide excess profits of about $767,000 a day, a figure Dominion disputes.

Dominion gained support from some major manufacturers, environmentalists, and the governor by agreeing to several add-ons to the bill. Those measures include the company eating $85 million in fuel costs, agreeing to a provision aimed at increasing the use of solar power and program to provide assistance for low-income customers. Some of the add-ons were in separate pieces of legislation that Dominion already supported before they were added to Wagner's bill.

The company said it supported good public policy that enjoyed broad support from various trade groups and nonprofits.

"The bills were about more than Dominion," company spokesman David Botkins said in an email. "They were about protecting customers, promoting renewable energy and giving the commonwealth the opportunity to best respond to some difficult challenges with the EPA's Clean Power Plan."

Most negotiations on Wagner's bill were conducted in private meetings with a select group of stakeholders — including a sit-down between McAuliffe and Dominion CEO Thomas Farrell II. Staff for Attorney General Mark Herring, who opposes the new law and is tasked with representing the state's electric consumers, were excluded from those private meetings.

Herring's staff aired its concerns during three public committee hearings on the bill.

Most of Dominion's other successes at the General Assembly this session came through helping to defeat legislation the company opposed, including a cap and trade proposal by Virginia Beach Republican Del. Ron Villanueva aimed at mitigating the damage of rising sea levels on Virginia's coast.

The company also got the General Assembly to preserve a coal-related tax credit electric utilities can use, which the legislature's own watchdog agency has said doesn't appear to be helping the state's coal industry as intended. Dominion said the credit was needed to help the state's small coal producers.

And groups of well-organized citizens concerned about what affect Dominion's plans might have on property values had little luck trying to put limits on the company. Dominion helped defeat a bill backed by property owners from Prince William County who wanted to ensure the utility did not put up high voltage power lines in certain parts around the town of Haymarket.

Dominion said the legislation wasn't necessary and could drive up ratepayers' bills. Lawmakers reacted forcefully at a committee hearing when some speakers criticized the company.

"Dominion power has been great to Virginia," said Del. Lionell Spruill, a Democrat from Chesapeake.

Legislation aimed at limiting Dominion's ability to go on property owners' land to survey for the proposed Atlantic Coast Pipeline natural gas pipeline across the Blue Ridge Mountains also died a quick death.

Botkins said the company "generally had no active part" in killing legislation the company did not like.

"They appeared to have collapsed under their own weight as bad policy," he said.

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