RICHMOND, Va. - A controversial 2015 electricity rate freeze for Dominion Energy and Appalachian Power may soon be a thing of the past, and Virginia customers would get a refund for what the governor’s office called “overcharging” since 2015.
SB 966, backed by Governor Ralph Northam, the utility companies, along with Senate Democrats and Republicans, would make changes to how the state regulates the base utility rates Dominion and Appalachian charge customers for power. The bill reinstates State Corporation Commission (SCC) oversight of rates, requires the companies to lower them, and promotes the use of renewable energy sources, like wind or solar.
As part of the legislation, Dominion would invest more than $1 billion to modernize Virginia’s energy, which company officials said would mean improvements like buried power lines in some areas and smart meter technology on homes.
Dominion would also invest $130 million to extend their Energy Share program to 2028. The program helps veterans, elderly, and low-income customers with weatherizing their homes and lowering power bills, Dominion officials said.
The 2015 rate freeze legislation was approved by lawmakers when Dominion, one of the largest donors to Virginia political campaigns, argued that clean power regulations by the Obama Administration would lead to increased power rates for their customers. The Trump Administration has since revoked those regulations.
Lawmakers and the electric utility are now backing away from the need to freeze rates. Senator Richard Stuart (R - Montross) called his 2015 vote in favor of the rate freeze a “mistake” that lawmakers are now trying to correct. Senator William Stanley (R - Moneta) said lawmakers need to hit the “reset” on the 2015 decision.
According the governor’s office, lawmakers, officials from the power companies, and other stakeholders met to hash out the framework of SB 966.
There are several key details, according to the Northam administration:
- Repeals the 2015 rate freeze and restores full regulatory oversight of electric utilities.
- Requires Dominion to issue $200 million in rate credits to consumers who were overcharged during the rate freeze period. Appalachian Power will issue $10 million in credits.
- Requires Dominion to reduce power rates by an additional $125 million and Appalachian Power to reduce rates by $50 million.
- Requires utilities to make $1.145 billion in investments in energy efficiency projects and low-income energy assistance over the next 10 years.
Dominion officials said the rate credits would show up on customer bills once the law takes effect.
Additionally, officials said $125 million in federal tax savings from the 2017 tax overhaul legislation in Congress would be passed on to customers. Dominion said those savings would equal about $6 per month on an average customer’s bill.
Consumer groups have questioned whether Dominion plans to dump on customers the cost of modernizing the energy grid, worrying that the company would “double charge” customers for modernizing the grid and questioning how long the rate freezes will actually last.
In response to those criticisms, Dominion officials said the language of the bill does not allow them to charge customers for infrastructure upgrades. The legislation would not allow for a rate increase until 2024 and that would require SCC approval, Dominion officials said.
A vote on SB 966 is expected in the Senate later this week. If approved, the House of Delegates would have to sign off on the measure as well.
CBS 6 spoke with several Dominion customers about the potential changes. Most customers said they would welcome a refund on their power bill, whether it came from overcharges or savings.
"Over the long run, I think it’s safe to say we’ll all benefit from it,” said Heather Ormond, who likes the idea of modernizing Virginia’s power grid. “It’s going to happen so now is the best time probably.”
Barbara Peters, who lives in Richmond’s Fan District, said she does not necessarily trust that the Dominion will live up to their promises laid out in the legislation.
“I don’t trust Dominion. They wouldn’t be the biggest political donor if I could trust them,” Peters said.