Northam voices 'significant concerns' on electric rate bills

“I’m ready to work with all stakeholders on this issue, but I have significant concerns about the bill that is on the table,” Northam said in response to questions from The Associated Press.

Northam had not previously weighed in on the legislation, which is part of a contentious fight over electric rates and Dominion’s political influence at the General Assembly. His position could help shape the debate as it moves forward.

Dominion spokesman David Botkins said the legislation is a “work in progress.”

“We haven’t even had the first committee meeting on the bill yet,” he said.

One of the governor’s top legislative priorities is a bill allowing Virginia to join the Regional Greenhouse Gas Initiative, a regional cap-and-trade program that mandates emission reductions in the power sector. That legislation, which failed to pass a GOP-controlled Senate committee Thursday, could be a key bargaining chip in the proposed energy regulation overhaul.

Northam said the Regional Greenhouse Gas Initiative bill and the utility-backed rate bill are a “great opportunity” to improve Virginia’s energy sector.

“I look forward to working with all of our partners to finalize a bill that works for all Virginians,” he said.

In the last months of Gov. Terry McAuliffe’s administration, the State Air Pollution Control Board approved a draft regulation setting a carbon cap for power plants that would link Virginia to the network of RGGI states to trade carbon allowances. However, under that rule, Virginia will not able to sell the carbon allowances directly. Rather, the majority of revenue from the sales will go to allowance holders, such as Dominion, though with an expectation that ratepayers benefit from any proceeds.

On Thursday, the Senate Committee on Agriculture, Conservation and Natural Resources voted 8-7 to kill a bill by Sen. Lynwood Lewis, D-Accomack, that would have allowed the state to manage its own auction program and plow the proceeds into a range of programs, including energy efficiency and renewable energy, as well as for workforce training and economic development in Southwest Virginia and to help coastal localities grappling with recurrent flooding and sea-level rise. A companion measure is still alive in the House of Delegates.

“Frankly the politics in the House are no better than they were in the Senate,” said Mike Town, executive director of the Virginia League of Conservation Voters. “I think the legislation has a tough road ahead but we still have hope we can work to get something done.”

Northam’s statement come as lawmakers wrestle with how to unwind a utility-sponsored 2015 law that blocked the State Corporation Commission from reviewing base rates, which make up a majority of a customer’s bill.

Dominion is allowed to earn a fair profit on its expenses and regulators say the company’s base rates are currently overearning by $400 million a year. The company said the figure is lower. The 2015 law also lets utilities keep millions of dollars from the recent federal tax overhaul, cuts that would normally be passed on to customers.

A bipartisan group of lawmakers is pushing for a straightforward repeal of the 2015 law, but a Senate committee has already dispatched one version of that legislation.

The utility-backed legislation would give some refunds back for past overearnings, but allow the utilities to spend unspecified amounts on modernizing the grid and boosting renewable energies that would effectively prevent regulators from being able to order base rates to be lowered.