RICHMOND, Va. (AP) - Virginia's biggest electric utility wants to weaken state oversight of its rates, saying the move will help protect its customers from possible steep increases in their electric bills brought on by federal efforts to curb carbon emissions.
Dominion Virginia Power (NYSE: D) is supporting a bill by Virginia Beach Republican Sen. Frank Wagner to freeze its base rate through 2020 by exempting the company from its biennial rate review by the State Corporation Commission.
Critics of the bill, which is set for its first hearing Thursday, say it hurts consumers and amounts to a giveaway to one of the most politically powerful companies in the state.
But Dominion Vice President Dan Weekley said the legislation will give both Dominion and its customers stability while Virginia tries to figure out how to best comply with the U.S. Environmental Protection Agency's Clean Power Plan.
"There is no downside to the customers here whatsoever ... unless you believe electricity prices are going to go down," Weekley said.
Weekley and Wagner said a base rate freeze could prevent Dominion from having to prematurely shutter several coal-powered plants and pass on a massive rate hike to its customers.
Lawmakers in both parties and Democratic Gov. Terry McAuliffe have expressed concerns that the EPA's proposed rules, which are aimed at cutting carbon emissions and have not yet been finalized, would lead to large rate increases and unfairly punish Virginia compared to other states that are more dependent on coal.
In Dominion's 2011 biennial rate review, the SCC ruled that the company had made too much profit and ordered it to repay customers $78 million.
Wagner, who is among several lawmakers that own stock in Dominion, said his proposed legislation is a work in progress that has undergone significant changes since it was introduced last week. Wagner has been convening meetings with Dominion and various stakeholders, including some of the company's largest users, to hash out a compromise in private.
Wagner said changes to his bill were made at the request of some of Dominion's biggest customers, like the packaging company MeadWestvaco Corp, who wanted to make sure that Dominion undergoes a 2015 rate review before a freeze is put in place.
But many businesses, including those who have had representatives attend the private meetings, are not happy with the bill in its current form.
Brian Gordon, vice president of government affairs for the Apartment and Office Building Association of Metropolitan Washington, said his members believe Dominion may have been "overearning" and that the most recent version of Wagner's bill would only require a limited rate review. He said his organization wants a more comprehensive examination by the SCC this year before any rate freezes go into effect.
Environmental groups staunchly oppose the bill and call it a gift for Dominion, which is the single biggest corporate donor to state politicians.
Democratic Attorney General Mark Herring, whose office is tasked by law to represent consumers' interest in utility matters, opposes Wagner's bill and has not been invited to any of the private stakeholder meetings.
Wagner said Herring's office missed its opportunity to have its voice heard when it didn't join a dozen other states in suing the EPA over the Clean Power Plan.
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