The Washington PostDemocracy Dies in Darkness

Virginia power broker in the hot seat in governor’s race

Tom Perriello, left, shakes hands with Lt. Gov. Ralph Northam at the start of the first debate of Virginia's Democratic candidates for governor April 29, 2017, in Fairfax, Va. (Sarah L. Voisin/AP)

Virginia law­makers have long agreed on at least one thing: They enjoy the financial generosity of the state's largest utility, Dominion Energy.

A regulated monopoly that delivers power to most of the state, Dominion is the top corporate political donor in Richmond. It is inescapable in this town. Its name is atop two office towers, with a new headquarters on the way. Dominion sponsors one of the city’s primary arts venues, an international bicycle race, local sports teams, school programs — it even handed out free redbud saplings at a recent herb festival.

But this year, 61 Democratic challengers for House of Delegates seats across Virginia have bucked tradition and refused donations from ­Dominion. Democratic gubernatorial candidate Tom Perriello has done the same, while Republican candidate Corey Stewart called Dominion a “horrible corporate citizen.” Two former state attorneys general — one Democrat, the other Republican — are challenging Dominion before the state Supreme Court.

Cuccinelli files brief challenging Dominion Power rates

In this era of populist politics and mistrust of big institutions, the crosshairs have settled on one of Virginia's most formidable corporate titans. Dominion, which has given $425,000 to Democrats and $356,000 to Republicans in the past year, finds its role in the political process being challenged in unfamiliar ways.

“Our investors, our employees — they expect us to be involved in the political process,” said Mark O. Webb, senior vice president for corporate affairs and chief legal officer. “Corporate citizenship is not a bad thing, and I think we feel strongly about that.”

Dominion’s woes are rooted in many factors — controversy over burying toxic coal ash along the Potomac River, building a pipeline in the western part of the state, proposing transmission towers across the James River — that hit political hot buttons, including environmental concerns on the left and property rights issues on the right. At the same time, a 2015 rate freeze that largely protects Dominion from refunding customers for overpayment raised questions about political influence in a state with some of the country’s loosest campaign finance laws.

And it all comes in a political climate of rampant populism in which major national figures, from Bernie Sanders to Donald Trump, have bashed large institutions.

“Dominion is exerting its institutional power and political power in Virginia at a time when that power is being critiqued both nationally and in Virginia,” said political scientist Quentin Kidd of Christopher Newport University in Newport News, Va.

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The company’s fortunes are intimately tied to state government. The General Assembly routinely handles legislation that affects Dominion, and it elects the members of the State Corporation Commission, which regulates utilities. The governor appoints leaders of the state Department of Environmental Quality, which reviews the impact of Dominion projects.

In the race for the Democratic nomination for governor, Dominion has become one of the few things that clearly separates two candidates who otherwise agree on most issues.

Whereas Perriello is riding the anti-Dominion wave, his rival — Lt. Gov. Ralph Northam — is caught in an old-school position that suddenly looks bad.

Northam has taken more ­Dominion money this year than any of his rivals. Between Jan. 1 and March 31, he received just under $22,000 from Dominion and its executives, according to the Virginia Public Access Project. Ed Gillespie, the front-runner for the Republican gubernatorial nomination, got just under $8,000 from Dominion or its executives in that time period.

Sen. Frank W. Wagner of Virginia Beach, another Republican candidate, got $2,700.

Northam also owns stock in Dominion — between $5,001 and $50,000 worth, according to his latest conflict-of-interest filing with the state. He recused himself from casting tiebreaking votes on ­Dominion-related bills while presiding over the Senate as lieutenant governor.

In his years as a state senator, Northam did cast votes on matters that related to Dominion, including in 2013 to establish a Nuclear Energy Consortium Authority — something for which the utility had lobbied.

But his campaign points out that Northam also voted on matters that seemed against Dominion’s interest, “including when he carried legislation to establish mandatory energy efficiency standards for utilities, and when he co-sponsored legislation with [state Sen.] Chap Petersen [D-Fairfax] to eliminate the ability for utilities to recover revenue lost as a result of implementing energy efficiency programs,” spokesman David Turner said.

Northam has pledged that if he is elected governor he will put all his investments into a blind trust.

In the meantime, the Dominion ties allow Perriello to hammer Northam for his position on two controversial gas pipelines being built in rural parts of the state — one by Dominion, the other by EQT Corp. and NextEra Energy. Northam — like his patron, Gov. Terry McAuliffe (D) — won’t condemn the pipelines, arguing that they will create jobs and drive economic development.

Instead, Northam insists that the pipelines should be subjected to the toughest possible environmental scrutiny. That has provided some of the few fireworks at Democratic candidate events. Perriello noted at the recent Fairfax debate that it was only after he took a stand against the pipelines that Northam wrote to the state DEQ urging a thorough environmental review.

When Perriello pressed Northam on whether he had consulted with Dominion before sending the letter, Northam demurred, saying he was “not going to stand here on the witness stand.”

In an Arlington forum this week, Perriello urged Northam to repudiate Dominion contributions. Northam countered that it was wrong to single out a donor and said there should be comprehensive campaign finance reform.

This troubles some Democrats, especially those in the new wave of activists looking to make up for the party’s poor showing in elections last fall.

Josh Stanfield, a former Sanders delegate who started a grass-roots group called Activate Virginia, settled on Dominion as a way to unite a crop of Democratic candidates being recruited to challenge incumbents for House of Delegates seats all around the state.

While Stanfield said it’s “unrealistic” to expect candidates to refuse all corporate donations, his group crafted a pledge to take a symbolic stand against contributions from Dominion. Nearly 60 Democratic challengers have signed up.

Stanfield and his young organization have not yet made an endorsement in the Democratic gubernatorial primary, but he is bothered by aspects of both candidates. Perriello’s financial disclosure shows a sizable investment in Fluor Corp., a major infrastructure firm that works for big energy companies. And Northam’s relationship with Dominion — both owning stock and taking donations — is “a major red flag,” he said.

Stanfield said he confronted Northam about the issue after a recent town hall in Yorktown.

“I understand Ralph doesn’t have the latitude to come out and say, ‘I’m done with Dominion money,’ ” he said. “But what he told me was, ‘You need to trust the character of your Virginia Democrats.’ ”

In the current political climate, that’s not enough.

“The last thing I can go to my group with is ‘trust politicians,’ ” Stanfield said. “That’s not going to sell this year. The Democratic brand has been demolished.”

Dominion is particularly hard to reconcile because it is so big and powerful, with 16,000 employees and $11.7 billion in revenue last year. Even its name has become grander over the years, evolving from the more utilitarian Vepco. Its logo looks like the hand of Michelangelo’s Adam receiving life from God, and its Web address conveys understated omniscience: dom.com. (The company has announced plans to change the logo to something more abstract.)

The final overreach for some critics — such as Petersen, the state senator who crusaded against Dominion during the most recent General Assembly session — was a five-year rate freeze that the utility won from state lawmakers in 2015.

Dominion argued at the time that the threat of President Barack Obama’s Clean Power Plan created so much uncertainty that it needed protection from its regular rate reviews by the State Corporation Commission. The measure drew bipartisan approval — sponsored by Wagner and signed into law by McAuliffe.

Now that President Trump has all but killed the Clean Power Plan, Petersen and others have argued that the rate freeze is unneeded, and that the state should again regulate Dominion rates. But lawmakers and the governor have declined to act.

A group of utility customers is challenging the rate freeze in the state Supreme Court, saying the General Assembly violated the state constitution by stripping the SCC of its power to raise and lower rates. Attorney General Mark R. Herring (D), who is running for another term and has accepted $10,000 in Dominion contributions since January, sent a lawyer to defend the law during hearings last month.

Herring’s stance drew scorn from two predecessors in that office: Democrat Andrew Miller and Republican Ken Cuccinelli II, who have filed a brief supporting the argument that the rate freeze was unconstitutional. Miller blasted Herring for not arguing on the side of consumers, and suggested he was swayed by Dominion’s campaign contributions.

Herring's office countered that he opposed the rate freeze when it was debated by the General Assembly and still believes it to be bad policy. But he doesn't consider it unconstitutional.

All of which has left the company scrambling to respond.

Since the first of the year, Dominion has staged meetings for its employees to explain its positions. It has taken out ads in newspapers comparing its rates to those of other states and sent newsletters to retirees and its 80,000 Virginia shareholders.

Its message is fashionably populist.

“Politicians on both sides in the extremes have sort of pressed into public mistrust . . . to demonize and make these big institutions the bad guy,” Dominion spokesman David Botkins said. “But these institutions are made up of moms and dads and brothers and sisters and families raising their kids in the communities where they live and work. So when Dominion is being attacked, Virginians — hard-working Virginians — are being attacked.”

An earlier version of this story mischaracterized two pipeline projects in rural Virginia. Both pipelines are gas-only and one of the projects is proposed by EQT Corp. and NextEra Energy. This story has been updated.

Fenit Nirappil contributed to this report.

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