Governor signs bill to freeze reviews
Gov. Terry McAuliffe on Tuesday signed into law legislation that bars the State Corporation Commission from conducting two-year reviews on rates and profits for Dominion Power and Appalachian Power for the next five years.
The law will also freeze electricity rates for the next five years.
In return, Dominion Power will freeze its rates for customers and waive $85 million in fuel costs incurred in the winter of 2014, as well as investing monies into solar energy.
Robert Richardson, a Dominion spokesperson, said the company welcomes the new law.
“We are pleased and thank Governor McAuliffe for his signing of Senate Bill 1349 … this bill is the result of strong collaboration among bi-partisan legislative leaders and General Assembly members along with business, consumer, community and environmental groups,” Richardson said.
Richardson said the legislation “will result in an approximate 5 percent reduction in residential rates and about 10 percent for industrial customers” by April 1.
Dominion Power has a foothold in the southern end of Shenandoah County, which has most of its electricity supplied by the Shenandoah Valley Electric Cooperative. Mike Aulgur, a spokesperson for the cooperative, said it “has no position on the bill whatsoever” because electric cooperatives are not profit driven.
“Anytime we seek to change our base rates, we file a cost of service study with the State Corporation Commission, they evaluate that study, its rates and rates of returns and we live with that decision,” Aulgur said.
He added, “We are owned by our members, so those members are our stakeholders … they’re local, we’re local … we don’t have interest spread around the world in investors and shareholders, so our motives are different than investor-owned electric companies.”
The Rappahannock Electric Cooperative supplies electricity to Warren County. Matt Faulkner, director of external affairs for the cooperative, said the temporary deregulation is a “unique and interesting solution” for power companies facing new Environmental Protection Agency regulations.
“We belong to the Old Dominion co-op, which supplies our electricity and they own 50 percent of the Clover Power Plant, which is the second largest coal power plant in the state, so we face a lot of the risks Dominion faces with cutting down of carbon emissions,” Faulkner said.
Faulkner added, “Dominion is taking the gamble by freezing the rates, because if the costs go up too much, they’ll have to pay for it through the stockholders, but we don’t have that ability … any costs we incur are passed on to our customers. We try to keep that minimal.”
In a news release from the Governor’s office, McAuliffe expressed his support of the legislation and the process it went through to land on his desk.
“When this bill was introduced, I expressed concerns about several of its provisions, however after working with the General Assembly to make key changes, I have concluded that this legislation represents a net positive benefit to Virginians and to our economy,” McAuliffe said.
During the legislative process, Attorney General Mark Herring expressed his opposition to the bill. Michael Kelly, a spokesperson for Herring, said Herring did not like how the bill limited the power of the State Corporation Commission to verify if power companies are charging high rates.
“We oppose measures that limit the attorney general’s ability to advocate for the lowest rates possible or ties the hands of the SCC in setting appropriate rates,” Kelly said. “We said all that throughout the process.”
Contact staff writer Henry Culvyhouse at 540-465-5137 ext. 184, or firstname.lastname@example.org