(The Center Square) – A set of once-matching utility regulation bills backed by Dominion Energy passed out of the Virginia Senate and House this week, paving the way for further debate and discussion as lawmakers seek to settle differences between the two bills.
Lawmakers in the Senate voted Tuesday to advance Senate Bill 1265 – a measure that currently looks very different from companion House Bill 1770, which also cleared the House of Delegates Tuesday.
When first introduced, both bills included a provision that would alter how Dominion’s return on equity could be determined by the State Corporation Commission. Some lawmakers argued the provision would essentially ensure the utility giant would see an increase in its return on equity, which is a measure of profitability.
The House version of the bill completely wiped out the return on equity provision in an amended version of the bill introduced last week, but the Senate’s bill maintains a version of the return on equity provision that would sunset in 2027.
Opponents of the provision have raised concern it would interfere with the SCC’s discretion to set Dominion’s return on equity, while bill proponents argue any increases in rates would still be subject to SCC approval.
“We are disappointed in the priority to push through a complicated and risk-ladened Senate measure focused on padding the earnings of a utility on the backs of captive ratepayers, while struggling to ensure sufficient regulatory process improvements and oversight, and provide equivalent consumer benefits and protections,” Dana Wiggins, director of the Center for Economic Justice at the Virginia Poverty Law Center, told The Center Square in a statement Wednesday.
Key differences between the House version and the Senate version of the bill go beyond just the return on equity provision, though both maintain a provision increasing the frequency or rate reviews from every three years to every two years.
Amendments to HB 1770 last week added a provision to require utilities to get SCC approval before permanently retiring existing carbon-emitting power plants. Opponents raised concern about this provision, arguing it interferes with the Virginia Clean Economy Act – a bill passed in 2020 requiring the elimination of carbon emissions from Virginia utilities by 2050.
Will Cleveland, a senior attorney with the Southern Environmental Law Center, told The Center Square last week the amended bill essentially says “rather than planning to retire, utilities should plan on not retiring unless they voluntarily decide they want to retire something.” Cleveland added the provision “greatly impedes the purpose of the Clean Economy Act,” echoing a similar sentiment to those expressed during a House committee hearing last week.
The Senate version of the bill, meanwhile, maintains a provision that would take $350 million worth of rate adjustment clauses, also known as “riders,” and combine it with the utility’s costs, revenues and investments and generation and energy distribution. By slashing riders and increasing the return on equity, lawmakers estimate it will save customers between $6 to $7 per month.
Another provision in the Senate version of the bill would allow the company to use fuel cost bonds to blunt the impact of future fuel spikes on consumer’s bills, which the company says is tied to the war in Ukraine. The company would be able to spread the impact of the fuel cost spike over 10 years and cover the costs with the bonds.
Senate Majority Leader Richard Saslaw, D-Fairfax, urged lawmakers to advance the Senate bill Tuesday, arguing without this measure, “rates will go up $17 a month on the average bill.”
Lawmakers in the Senate acknowledged the Senate version of the bill is likely to be amended and changed again once it is heard in the House. Depending on the changes made to the bills as they are heard in the opposite chamber, lawmakers are likely to form a conference committee to resolve differences between the two measures.
Senate Minority Leader Tommy Norment, R-James City, told lawmakers Tuesday the Senate version of the bill as it now stands is “just a marker from our position, which will be contrasted and debated with the bill coming out of the House of Delegates.”
“As a poet once said, there are miles to travel before we sleep on this bill,” Norment added.
