Even as the 2007 Virginia General Assembly dialed back its 10-year-long experiment with electric deregulation, lobbyists for Dominion Resources pushed to ensure that re-regulation in Virginia would be on the company's terms. With Dominion's electric utility rate set to expire, those terms are about to be made known.
“The bottom line is, consumers in Virginia can expect that rates are going to steadily increase for the foreseeable future,” says Irene Leech, president of the grassroots Virginia Citizens Consumer Council. “There basically are really no limits on what that will be for consumers.”
The state's various electric companies — led by the largest, Dominion — have more than a dozen applications before the State Corporation Commission between now and January, seeking a variety of rate increases to account for rising fuel costs and to offset investments in new electric generation facilities.
Leech foresees 80- to 90-percent increases in consumer electric bills.
Dismissing doomsayers such as Leech, Dominion disagrees that re-regulation has short-sheeted Virginia consumers. “I would say that Virginia's re-regulation legislation and the model that we operate under now in Virginia is very pro-consumer,” says David Botkins, a Dominion spokesman.
Leech and other critics maintain that Virginia's re-regulation legislation emphasizes protection of electric companies' profits over stable, controlled rates for consumers, and creates incentives for utilities to build new power plants with much of the tab passed along to customers. The legislation also largely relegates the SCC — the state entity long tasked with grounding the profit potential of electric companies — to what one critical 2007 report called “a rubber stamp.”
That report's author, Steve Sinclair, is chairman of the Virginia Energy Purchasing Governmental Association, which represents 180 government agencies that all are Dominion customers. He calls Virginia's re-regulation “probably the most consumer unfriendly re-regulation in the country.”
Dominion's Botkins disagrees. “There were changes, but their authority is completely intact,” Botkins says of the SCC. “They have all the power and authority they've always had.”
For example, Botkins says the SCC this month succeeded in scaling back a requested 13.1-percent rate hike sought by another Virginia electric company, Appalachian Power Co.
Antonio Rigali, who heads the Virginia State Building Construction Trades Council, is unconvinced. Rigali was in Richmond last week with about 60 members of his organization to protest Dominion's failure to hire state labor for construction projects. The protesters also took umbrage with Dominion's current SCC case, which seeks a $77.9 million rate increase to account for wholesale power transmission costs.
That increase would mean very little to most customers — about a 1.2 percent increase on monthly bills — but to Rigali's people, a little is a lot.
The state's trade union membership has hit “at least 30 percent unemployment right now,” Rigali says. Statewide unemployment is around 7 percent.
“It's going to be the residential consumers who … are going to have to get so badly hurt that they're going to push back on the legislators to get something changed,” Leech says.