Electric bills may go down if Virginia court undoes 2015 law

By Alan Suderman, Associated Press

Virginians could see their electric bills go down if the state Supreme Court decides a 2015 law temporarily banning state regulators from adjusting a portion of electric rates is unconstitutional.

 

RICHMOND, Va. (AP) — Virginians could see their electric bills go down if the state Supreme Court decides a 2015 law temporarily banning state regulators from adjusting a portion of electric rates is unconstitutional.

A group of large industrial electric customers and advocates for the poor pressed the high court Friday to undo the law. They said the General Assembly had improperly stripped state regulators of their ability to lower higher-than-necessary rates of electric monopolies Dominion Resources and Appalachian Power, a move that violated the Virginia Constitution and was hurting customers.

But Democratic Attorney General Mark Herring's office argued the other side, saying the General Assembly was within its constitutional powers to suspend rate adjustments even if it was bad public policy.

The Virginia Supreme Court is expected to announce its decision within a few months. Justices questioned both sides' arguments, but there were no obvious indications how the majority would decide.

Overturning the law could have serious implications for ratepayers' bills and electric utilities' bottom lines.

Dominion helped usher through the 2015 law, saying it was needed to provide rate stability in the face of potentially expensive federal carbon emission rules. The company has also stressed that other parts of the law have increased solar energy production and provided aid to low-income electric users.

But critics have called the law a giveaway of potentially $1 billion or more to shareholders of the company, which is among the most politically powerful corporations in Virginia.

A subsidiary of Dominion provides power for about two-thirds of the state, while Appalachian Power covers the state's western third.

The law shields companies from having to give refunds or lower their rates for several years even if regulators have found their base rates — which make up a majority of a customer's bills — are too high. During the same period, it also bars utilities from raising their base rates if they aren't enough to cover their costs.

The State Corporation Commission found in both companies' most recent base rate cases that they were overearning. Using SCC figures, an energy consulting firm's calculated that the 2015 law added $68 a year to a typical Dominion residential customer's bill, while a typical Appalachian Power customer is paying $45 a year too much.

Former Republican Attorney General Ken Cuccinelli, who represented the Virginia Poverty Law Center in opposing the 2015 law, said lower-income Virginians can't afford to be paying higher-than-necessary electric bills because of "crony capitalism." He was joined by former Attorney General Andrew P. Miller, who criticized Herring for accepting large donations from Dominion while siding with the company in this case.

"When you have that type of money being contributed to a candidate, there's some reasonable expectation of some type of return. And I frankly think what you see today is an example of that type of return," said Miller, a Democrat who served in office in the 1970s.

Dominion has given Herring, whose office spoke out against the law while it was being debated by lawmakers, about $50,000 since 2014.

Herring spokesman Michael Kelly said the Democratic attorney general "has stood up for consumers time and again" and still thinks the 2015 law is bad policy. But Kelly said whether the General Assembly exceeded its authority "is a separate question."

Dominion's political influence has been under the microscope lately as candidates in Virginia's closely watched race for governor have taken aim the company. Democrat Tom Perriello and Republican Corey Stewart have both promised to limit the company's political influence if elected. And 54 non-incumbent Democrats running for the state House recently pledged not to accept any political contributions from the energy giant.

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