Two years ago, state lawmakers passed a bill to freeze base rates for the commonwealth’s principal electric utilities, Dominion and Appalachian Power. The rationale for the measure at the time was the federal Clean Power Plan, a heavy-handed regulatory scheme to reduce climate-change emissions. If the CPP took effect and Dominion had to shut down coal-fired plants, the argument went, ratepayers would be on the hook to cover the resulting big bills. A rate freeze would protect them from such financial shocks.
Critics of the legislation called it a giveaway to the utilities. Although it would prevent rate hikes, the legislation also would lock in rates that otherwise might go down, and prevent the sort of rebates the power companies had been obliged to make in the past.
As it turned out, the fears about the Clean Power Plan were unfounded. The Supreme Court put the CPP on hold. Then Donald Trump won the presidency and put it in the trashcan.
Yet efforts this year to un-freeze electricity rates went nowhere. And now Virginians are learning just how much that has cost them. The State Corporation Commission has issued a report saying that, were the rate freeze not in effect, Dominion customers would be due at least $133 million in refunds. (The company’s excess revenue actually could be as high as $252 million, but customers aren’t entitle to full refunds, only partial ones.)
This is not exactly how the law was pitched two years ago. Back then, the state’s big shots claimed it would benefit the public.
“This legislation represents a net positive to Virginians and to our economy,” said Gov. Terry McAuliffe.
A spokesman for Appalachian Power said the bill was “a good opportunity to protect customers.”
Chamber of Commerce president Barry DuVal said the measure “would cut rates for Dominion customers.”
Reggie Gordon, then head of the Red Cross (a beneficiary of Dominion financial support) said the bill would help people on fixed incomes.
Naturally, Dominion favored the bill, too — and still does. Although “no one likes to pay more than they have to for anything,” said Mark Webb, the company’s senior vice president for corporate affairs back in March, “the freeze in Dominion Virginia Power’s ‘base rates’ imposed by the General Assembly two years ago is working as designed.”
Indeed. That’s just what critics of the legislation warned us about.