It was easy to predict. Last June, I recommended three steps Virginia should take before tackling additional changes to its energy laws. Fixing the process first would involve capping campaign contributions, developing a stronger advocacy voice for consumers in front of legislators and dumping a legislative joint study commission that had proved subservient to the electric utilities.
Those suggestions were made before the outcome of the 2019 election reversed the state’s political polarity, but they were intended to apply either way. Reversing polarity proved meaningless. Eight months later, the new Democratic majority was behaving the same way as its predecessors.
The proposed campaign finance reforms failed. One bill seeking to prevent donations from regulated public service corporations never even made it onto a committee meeting docket in the House of Delegates. At least the state Senate voted openly to kill state Sen. Chap Petersen’s (D-Fairfax City) campaign finance bills.
The State Corporation Commission (SCC) and Office of the Attorney General staff have been more aggressive this year in describing the consumer cost of proposals, but Democrats have been shooting the messenger. Sometimes legislators repeated utility talking points, and sometimes they dismissed consumer cost as irrelevant against environmental goals.
There was no effort this session to take the consumer protection function from the elected attorney general who relies on the same donors. The Commission on Electric Utility Regulation, which hasn’t even met since 2017, received a two-year extension on its existence. The new majority may shuffle the membership and breathe some life into it, but the bill extending its authority didn’t alter its mission.
The money that flowed from within and outside Virginia in the most recent election cycle was unprecedented, and big money has the impact donors desire. Dominion Energy spent $2.1 million during the cycle, according to the Virginia Public Access Project, countered by more than $2.4 million from the League of Conservation Voters and more than $3.5 million combined from Charlottesville environmental activist Michael Bills, his wife and the Clean Virginia organization he financed.
The most visible piece of legislation passed this session had the blessing of utility and environmental donors. The Virginia Clean Economy Act preserves most of the carbon-emitting generators in Virginia, perhaps for their entire useful lives, but it will also ask ratepayers to finance a major offshore wind installation and multiple square miles of new solar fields, with the utilities owning most of those projects and reaping a generation of profits.
The worst example of collusion between the two supposed opponents is their cooperation to further hamstring the SCC’s authority to ensure that the projects are built in a reasonable and prudent manner on a rational timetable. Instead, the long bill is peppered with instances in which specific projects financed in a specific way are deemed “in the public interest” or “reasonable and prudent” on their face.
When the utility used highhanded methods to generate and pad profits on natural gas plants, they were condemned. They don’t suddenly become acceptable when they generate profits for offshore wind developers or the companies that build and install solar panels fifty acres at a time.
Back in June, the focus was on one particular reform proposal. Clean Virginia and other groups were proposing that Virginia break up its two monopoly electric utilities, leaving them with only the distribution business, the wires side. Their generation divisions would enter the marketplace and face true competition from independent power producers offering power-purchase agreements or selling into the regional transmission organizations. That is a model that would bring Virginians lower cost solar or wind electricity.
That idea failed in committee, and passage of the Virginia Clean Energy Act as now structured takes Virginia further down the old and crooked road of monopoly. Also rejected was the proposal to subject Dominion to a proper rate case in 2021, with the SCC free to order customer refunds and set correct base rates. After a strong endorsement from the House, it fell one vote short in a Senate committee long dominated by utilities interests.
With consumers all but voiceless, unlimited donations continuing from various energy interests, the key regulator neutered and the legislature showing no interest in real discussion between sessions, the new Virginia looks much like the old one.
The writer is a senior fellow for state and local tax policy at the Thomas Jefferson Institute for Public Policy and contributing editor at Bacon's Rebellion.