Dominion Power will be shielded from regular financial reviews for five years under a bill signed into law Tuesday by Virginia Gov. Terry McAuliffe (D).
The measure would freeze base rates for half a decade but would also put on hold biennial independent scrutiny that in the past has led to refunds to customers or reduced rates. Dominion would retain the ability to ask for special permission to raise rates. The bill was originally drafted by Dominion officials, according to its sponsor, Sen. Frank W. Wagner (R-Virginia Beach).
Environmentalists, consumer advocates and state Attorney General Mark R. Herring (D) opposed the bill as a ploy to avoid oversight by the State Corporation Commission (SCC).
McAuliffe said in a statement that while he had “concerns” about the bill, after several changes he “concluded that this legislation represents a net positive benefit to Virginians and to our economy.”
Those changes include a clearer path toward solar power construction and a pilot program to help low-income Virginians with their energy bills.
Dominion officials argued that the bill was necessary to help the company deal with new federal climate change regulations, which the company says may shutter coal plants in the state.
While the SCC did not take a position on the bill, an attorney for the commission told lawmakers that any new costs could be worked out through the existing process.
In a statement, Wagner thanked McAuliffe for signing “a clear and unmistakable, bi-partisan call for electric rate certainty during this time of regulatory turmoil.”
In signing the bill, McAuliffe released an executive order directing his administration to ensure that the energy efficiency and assistance programs are implemented and that Dominion meets its goal of producing 400 megawatts of solar energy by 2020. Dominion is scheduled to open its first solar facility, generating 20 megawatts of energy, this summer.
The governor said he would review that progress each year to determine whether additional steps should be taken to nudge the utility toward those environmental and economic goals.
The solar power amendment helped quell the anger of environmental groups. But Glen Besa, president of the Sierra Club of Virginia, urged McAuliffe in a recent editorial to veto the bill or add more aggressive clean-energy targets. The legislation states that building a solar facility is “in the public interest” and allows Dominion to raise rates to deal with the cost, but it does not require the company to build solar generators.
The bill also applies to Appalachian Power, which serves mostly central and southwest Virginia.
McAuliffe refused to take campaign donations from Dominion in his 2009 campaign for governor over the company’s opposition to government-mandated use of renewable energy. He softened his stance toward the company in 2013, taking $75,000 for his campaign, $50,000 for his inaugural committee and $35,000 for his post-election political action committee. The Sierra Club, however, invested far more in McAuliffe, giving $468,000 to his gubernatorial campaign.