RICHMOND — Gov. Ralph Northam’s compromise bill to restore state oversight of electric utility rates moved ahead in the House of Delegates and the Senate on Thursday, despite renewed warnings from the State Corporation Commission and state attorney general’s office that it does not protect consumers.
Supporters, including a handful of environmental groups, praised the complex legislation for encouraging the state’s two primary utilities — Dominion Energy and the far smaller Appalachian Power — to invest in renewable energy and grid modernization.
It does that by saying if the SCC finds either utility has overcharged consumers, the company doesn’t have to rebate the money to ratepayers. Instead, it can make the investment.
Northam’s office says that provides the utilities with capital for modernization while protecting consumers from fluctuations in rates.
But critics caution that it also lets the utilities “double dip,” or charge consumers twice for making those investments. That’s because the utilities would get to keep the overpayment, plus interest, while also inserting the cost of the new investments into base electricity rates.
It’s as if someone owed you $20,000, repaid the loan by giving you a car but required you to make the full loan payment on the car, Kimberly Pate, director of accounting at the SCC, told a House panel Thursday.
“So you’ve effectively paid twice,” she said to the Commerce and Labor Committee. Sam Towell, a deputy state attorney general representing consumer interests, said his office agreed with that analysis.
Dominion, which helped craft the legislation, said that characterization was incorrect. Top lobbyist Jack Rust told the committee that the bill would not allow double-dipping because the utilities would not be able to increase base rates to cover those investments.
Dominion has been promoting the bill through a public relations campaign that recently included television ads airing across the state during Super Bowl weekend and the days following.
The company’s influence in Richmond has been a major issue since the fall elections. On Thursday, a Charlottesville investor who has given heavily to Northam and other Democrats offered to pay thousands of dollars to state lawmakers who pledge to stop taking donations from Dominion. The proposal from Michael D. Bills was first reported by the Richmond Times-Dispatch.
Lawmakers seemed confused Thursday by the debate over double-dipping. Del. Gregory D. Habeeb (R-Salem), who had voted against the bill in subcommittee, said he would vote for it in full committee but hoped it would continue to evolve.
The House committee advanced it to the floor on a 17-4 vote.
On the Senate side, the same legislation was already on the floor, and Sen. J. Chapman “Chap” Petersen (D-Fairfax City) tried to amend it to solve the double-dipping issue. He proposed stripping out the language that allows the utilities to avoid paying rebates if they invest in renewables or grid modernization. Sen. David R. Suetterlein (R-Roanoke) urged senators to approve the amendment.
“If this bill passes without the amendment, we’re not going to have refunds ever again,” he said.
But Sen. Frank W. Wagner (R-Virginia Beach), who sponsored the bill with Sen. Richard L. Saslaw (D-Fairfax), warned that the amendment would ruin an opportunity to move the state toward more wind and solar power.
“You could probably get a few more nickels in your pocket,” he said. But modernization is more important, and “we’ve got to give our investor-owned utilities a mechanism to make this happen.”
The amendment failed, 27-12. The bill is up for final passage in the Senate on Friday.