Gov. Ralph Northam faces a Friday deadline to sign, veto or amend a sweeping bill that would drastically transform the regulatory landscape for the two large Virginia utilities that together serve 3 million customers.
And at the 11th hour, a pair of state senators — one Republican, one Democrat — were urging Northam to make amendments to excise “the most grievous missteps” of the bill. As written, the bill would shift Virginia to what Dominion Energy, Virginia’s largest utility and the driving force behind the legislation, calls a “reinvestment model.”
Brian Coy, Northam’s spokesman, shed no light on the governor’s plans nor his reaction to the letter from Sens. Chap Petersen, D-Fairfax City, and David Suetterlein, R-Roanoke County.
“We don’t have any comment on the letter or his review of the legislation at this time,” Coy said Thursday.
Northam helped mediate talks to iron out provisions of the bill early on, then fully endorsed the utility overhaul. He told reporters last week that he would sign the bill, though Coy interjected that the administration would review the legislation.
The new framework would undo the increasingly untenable 2015 law that froze the ability of state regulators to lower utility base rates and issue customer refunds — allowing utilities to rack up millions in windfall profits. It would allow utilities instead to plow those excess earnings into spending aimed at modernizing the electric grid and expanding renewable energy sources such as wind and solar.
Suetterlein and Petersen, who have been outspoken opponents of the bill largely because of the restrictions it would impose on the regulators at the State Corporation Commission and breaks it would give to large utility customers at the expense of others, urged the governor to make two major changes.
One would eliminate accounting language that they contend allows Dominion to “front-load” costs into rate-review periods by deeming costs including those related to closing old power plants, severe weather and natural disasters, to be “fully recovered” during the three-year review period. That provision, the senators say, strips the ability of the commission to spread those costs over multiple years.
The other would remove the $50 million maximum on reducing rates in Dominion’s first rate review in 2021. Given that the commission has estimated Dominion may have overearned by as much as $426 million in 2016, the bill would “lock in above-market prices for the foreseeable future, even while taking away the ability to refund customers,” they wrote. The attorney general’s office of consumer counsel remains opposed to the bill as well.
David Botkins, a Dominion spokesman, said the bill has an “extraordinary” coalition of support that spans environmental and industrial groups. The bill includes givebacks to utility customers for past utility overearnings and savings from the federal tax reform, declares 5,000 megawatts of solar and wind in the public interest, boosts spending on energy efficiency programs and includes provisions pushing the commission to approve expensive power line burial projects.
“We appreciate the hard work they, the governor, and lawmakers on both sides of the aisle have put in to reach consensus on creating a smarter, stronger, greener electric grid with tremendous customer benefits,” Botkins said.
Among the hardest-working lawmakers on Dominion’s bill, Del. Terry Kilgore, R-Scott, who carried the House version, was roasted on the floor Thursday for his efforts during the House’s yearly “sensitivity caucus” mock award presentations.
“My seatmate is known for a lot of things,” said Del. Steve Landes, R-Augusta, who opposed the utility overhaul, one of the most picked-apart and debated pieces of legislation during the session. “Being a supporter of business is one of them. Being a supporter of larger corporations is another.”
Del. Lee Ware, R-Powhatan, who also opposed the bill, at one point likening the fight against it to the long odds against the evil forces of Mordor in “The Lord of the Rings” movies, called Kilgore, a major recipient of utility campaign cash, a “reverse Robin Hood.”
“When we come down here we represent the ordinary citizens. We’re here for them,” Ware said. “But sometimes we need to be thinking about the big boys as well. Even multibillion-dollar corporations need some love.”
Ware presented Kilgore, who chairs the powerful House Commerce and Labor Committee, with a Dominion Energy hat — to make it clear whose “team” he was on — and the first-ever “Overdog Award.”
Kilgore also got, complements of House Minority Leader David Toscano, D-Charlottesville, a gift certificate for ice cream at Meriwether’s, the café inside the Capitol, though only enough for “a single dip.” The jibe was a reference to a much-debated provision of an earlier version of the utility bill that would have allowed Dominion to charge customers twice for spending on renewable projects and grid enhancements, once by canceling out refunds and again by rolling them into the rate base on which it earns a profit.
Toscano successfully got an amendment inserted that eliminated the “double dip,” which Kilgore and Dominion insisted wasn’t in the bill in the first place.
Though some members winced at the overt message sent by the award — a trophy filled with fake cash that bore the logos of Dominion and Appalachian Power — Kilgore took it with a smile.
“It’s all in good fun,” Kilgore said. “That’s why I said at the end, ‘Check your feelings at the door.’ “
Ware called the award “self-explanatory.”
“It’s tongue-in-cheek good humor and just intended to poke fun, rib each other,” Ware said. “It was not intended to be anything other than good humor. It seems to me the gentleman from Scott took it in good humor.”
Even Del. Lee Carter, D-Manassas, a self-described Democratic Socialist who was among a group of new lawmakers who refused Dominion campaign cash, got in on the act. Carter delivered the award to Kilgore while sporting a Russian-style fur hat, complete with a hammer-and-sickle Soviet emblem, that was given to Del. Mark Keam, D-Fairfax. Keam apologized last month after he mocked Carter during a committee hearing by holding up a tablet with the same Soviet insignia while Carter spoke.
Carter, a Marine Corps veteran who is also among a group of new Democrats critical of the influence corporations like Dominion wield at the legislature, said the intent wasn’t to make light of that dynamic.
“We have 140 different opinions on everything,” he said. “Things get contentious. ... We’re poking fun at each other. ... As political as it is, this is a workplace.”