RICHMOND — It was an odd line of questioning. As a freshman delegate presented a bill aimed at holding down consumer electricity rates, a bipartisan pair of senators quizzed him on where he got the idea and why he was sponsoring it.
In other words, Del. Suhas Subramanyam (D-Loudoun) was not part of the usual club. Lawmaking that affects electric utilities in Virginia — especially the biggest one, Dominion Energy — has long been an exclusive arena of big dollars, connected lobbyists and predictable outcomes. Democrats ran last year on a crusade to shatter that tradition.
With majorities in both chambers now, they’re achieving mixed results. Lawmakers are on the verge of enacting sweeping environmental bills that commit the state for the first time to eliminating fossil-fuel-based energy. In a switch, the bills originated from the work of a group of energy technology companies and environmentalists, instead of from Dominion and its army of lobbyists.
But the giant utility has negotiated details of the bills. And separate efforts to break Dominion’s monopoly on most of the Virginia market and to restore fuller state oversight of consumer electricity rates have largely failed.
“Dominion was a big issue last fall, . . . and here we are just a few months later, and Dominion is going to end up in an even stronger position,” said Jesse Dickerman, a spokesman for Direct Energy, which backed legislation to open part of the market to competition.
While groups advocating gun control made headlines with big donations in last year’s legislative elections, environmental and anti-Dominion interests actually gave more money, according to the nonpartisan Virginia Public Access Project.
Many Democrats, meanwhile, ran on a pledge to reject all Dominion donations. But a proposal to prohibit such contributions failed early in this year’s General Assembly session.
A Virginia version of a Green New Deal, with aggressive environmental goals, also failed.
Instead, Democrats and a handful of Republicans have coalesced around the omnibus environmental bills that have passed both the Senate and the House of Delegates and are headed for a conference committee. Supporters argue that the legislation is so far-reaching, it could only have been achieved with Dominion’s cooperation. Few lawmakers have expertise in the complicated topic, and this year’s session has been nearly overwhelmed with a record number of bills.
Even some hard-line environmentalists have come to value a pragmatic approach. “If you want to keep the conversation going, you can’t do it with a dead bill,” said Del. Danica A. Roem (D-Prince William), who co-sponsored the Green New Deal but is tentatively supporting the omnibus.
The ambitious package, known as the Virginia Clean Economy Act, originated last year when members of the Advanced Energy Economy industry group began contacting legislators. AEE is supported by companies that have a stake in new energy technologies — Lockheed Martin, Microsoft, Apple and Ingersoll Rand, along with dozens of smaller businesses. The group reached out to industry associations and environmental groups and, in consultation with several lawmakers, proposed a complex bill that would recast the state’s energy future.
Different versions have passed the House and Senate, but in essence, the legislation would:
●Mandate that 100 percent of electricity in Dominion’s service area comes from renewable sources by 2045, and by 2050 for Appalachian Power, which serves the far Southwest. The House and Senate are haggling over those dates.
●Set deadlines for closing coal- and gas-fired power plants.
●Enter the state into a carbon cap-and-trade market called the Regional Greenhouse Gas Initiative.
●Require Dominion to develop 5,200 megawatts of offshore wind capacity by 2034.
●Set mandatory yearly targets for increasing energy efficiency.
●Require the utilities to accept more rooftop solar and other renewable energy generated by other producers, though still only a fraction of the amount reserved for Dominion.
Some of those items are already in place informally. Dominion says it plans to be carbon-free by 2050, in line with aspirational targets set by Gov. Ralph Northam (D) last year. The company also helped set dates for phasing out old power plants.
In addition, Dominion has a massive wind energy project underway off the coast at Virginia Beach. The legislation specifies that the new wind energy has to be utility-owned, protecting Dominion’s investment.
“There’s every potential for a really groundbreaking piece of clean-energy legislation,” said Dominion Senior Vice President William Murray. He defended the utility’s role in the process, pointing out that the company has to balance clean-energy goals with the need to keep rates stable and service flowing. “I’ve never heard anybody advocate for power outages, not once,” Murray said.
While many lawmakers support the goals, some note that the framework preserves Dominion’s ability to pass costs along to consumers. As a state-regulated monopoly, Dominion has a guaranteed rate of return on capital projects; it makes money on a gas pipeline or offshore wind farm no matter the cost.
Historically, the utility’s rates were reviewed by the State Corporation Commission. If commissioners found customers were overcharged, they could order refunds. The General Assembly whittled away most of that ability over the past decade, freezing base rates and ordering the commission to find big investments such as offshore wind to be “in the public interest.”
Many environmental groups support those steps as necessary to get the state weaned from carbon-based fuels. But consumer advocates worry the trade-off will be higher bills for consumers.
“It is irresponsible to build an environmental movement on the backs of ratepayers just to enrich a few,” said Del. Sam Rasoul (D-Roanoke), the leading advocate of the Green New Deal, which he said would have done more to protect low-income consumers.
The corporation commission last week estimated that the omnibus energy bill could increase the average customer’s monthly electricity costs by almost 24 percent. Bill supporters said the estimate failed to consider how the legislation would reduce energy usage and did not address the cost of doing nothing.
“Given how far behind Virginia is on addressing climate change, . . . this bill will be the largest leap forward [the state] has ever made,” said Sen. Jennifer L. McClellan (D-Richmond), who sponsored her chamber’s version of the measure.
But concern about cost cuts across party lines. A bipartisan bill to restore the SCC’s authority to review Dominion’s rates and issue refunds passed the House in February — rare success for something opposed by the utility.
Now, its prospects are dim. A Senate committee delayed bringing the bill up for a vote. After behind-the-scenes pressure, a hearing is scheduled for Monday.
Committee Chairman Sen. Richard L. Saslaw (D-Fairfax) said he is skeptical of the bill, but he wants “to hear both sides.”
His committee has killed other bills aimed at loosening Dominion’s grip, including two House-passed proposals that were supported by a coalition of major retailers and would have opened up the renewable energy market to competition from outside providers.
Saslaw said allowing big retailers to buy electricity elsewhere would leave a smaller pool of customers for Dominion as it made the expensive transition to renewables.
Some lawmakers expressed frustration with the idea that Dominion needs to be protected from changes in the market or regulatory climate. “Either way, they’re going to get paid,” said Del. Jerrauld C. “Jay” Jones (D-Norfolk), who co-sponsored the bill to restore the SCC’s oversight authority. “Dominion is going to be fine.”
A dust-up in the Senate last week demonstrated the utility’s pervasive influence. Sen. A. Benton Chafin Jr. (R-Russell) complained that the omnibus energy bill fast-tracks the retirement of a relatively new plant in southwest Virginia that has been burning piles of coal left over from a century of mining. Known as “gobs,” the piles cause runoff that pollutes waterways, and Chafin cited statistics about how effective the plant has been at cleaning them up.
Saslaw countered that Dominion had endorsed the plant’s early closing date. Chafin then held up a fact sheet that seemed to have a Dominion logo on it. Why, then, would Dominion “have provided to this senator these talking pieces,” Chafin said, “and spent numerous hours helping prepare” an amendment to change the date?
With the utility appearing to work both sides of the issue, the Senate voted to delay the plant’s closing. Murray, the Dominion executive, said later that the utility had never favored closing the plant before older facilities, blaming the date on a “quirk” in the complicated legislation. “In our view, that’s not good public policy,” he said.
One other bill opposed by Dominion is clinging to life. Subramanyam’s measure, which would let the state regulate how the utility charges customers for the cost of retiring old plants, is awaiting a vote on the Senate floor.
The fact that his bill seemed to catch senators off guard in the committee showed one thing, Subramanyam said: “This is a new General Assembly.”