RTD: Chap Petersen: It's not too late to save a billion dollars for the people of Virginia
It’s 2017. Donald Trump is president. The public is engaged. For too many years Virginians have seen the largest corporations get their way in our political system. It’s time to change.
This year, a single move by the governor could save more than a billion dollars for ordinary Virginians. How? By restoring a longstanding Virginia policy of requiring refunds when public utilities earn excessive profits. To do that, he would have to take on the most powerful players in Richmond.
In 2015, the Virginia General Assembly did something unprecedented: It suspended review of electric rates on two for-profit utilities, Dominion Power and Appalachian Power. Those reviews are conducted by the State Corporation Commission, which has regulated public monopolies since 1902.
The ostensible reason for the Assembly’s 2015 suspension was the Obama administration’s “Clean Power Plan,” which allegedly would have increased costs for producing power.
Two years later, Trump is president, and the Clean Power Plan is dead. However, the suspension of rate review remains.
Initially styled in 2015 as a “rate freeze” for its Virginia consumers, the Dominion-sponsored boondoggle was (and is) just the opposite. While “base rates” are frozen, there is no value to ordinary consumers, since power bills are locked in above-market base rates.
Meanwhile, utilities can increase costs through rate adjustment clauses, or RACs, which add additional fees to consumer bills. Those add-ons currently constitute about 40 percent of a monthly bill, and that figure will increase as the 2017 Assembly adds new riders for costly hydroelectric and nuclear power facilities, as well as for undergrounding existing utility lines.
Rate freeze? More like refund freeze. If these bills become law, the retail cost of electric power in Virginia — already the highest in the southeastern United States — will continue to increase.
The monopolies claim the spoils. According to former Attorney General Ken Cuccinelli, Dominion Power enjoys $300 million in excess profits annually — a silent tax paid by Virginia customers. In four years, this aggregate number will rise above $1 billion.
How did this happen? The first reason is obvious. For-profit utilities spend millions in Richmond subsidizing politicians, advocacy groups and charities. The second reason is more subtle. Electricity policy is complicated. Part-time legislators have minimal time or knowledge to digest the factors, which gives enormous leverage to industry lobbyists. When in doubt, legislators will say “yes” to corporate giants — that’s why an independent regulator is so critical.
In 2017, I filed SB1095 to bring back rate review. Not surprisingly, that bill was opposed by the for-profit utilities and ultimately defeated.
But the governor has the final say. Under the state constitution, he can send down legislation at any time to restore the SCC’s historic rate review. Or he can amend an existing bill that seeks new rate increases for the utilities.
Any reform can be acted upon and take effect on July 1, 2017.
Governor, do the right thing and save a billion dollars for the citizens of Virginia. It’s the right thing to do, and it’s the right time to do it.
Link – http://bit.ly/2ktCUFf