Dominion Has Overcharged Virginians $1.2 Billion Since 2015
A testimony filed at the SCC this month alleges Dominion Energy overcharged Virginian customers $1.2 billion in the last six years.
Dominion Energy is currently undergoing a triennial review, during which the SCC evaluates the earnings of public utilities.
A number of bills which would have provided rate relief to energy customers and restored the regulatory oversight of the SCC were killed in the Senate Commerce and Labor committee earlier this year after garnering bipartisan support in the House of Delegates.
Virginians have been overcharged $1.2 billion by Dominion Energy since 2015, according to a testimony filed earlier this month at the State Corporation Commission. The testimony, which was filed by a former utility executive and regulator from Texas, is part of Dominion’s ongoing triennial review. The energy monopoly is required to undergo an evaluation by the SCC of its earnings every three years, and through this triennial review, the SCC is able to make decisions about whether or not customer base rates should be adjusted. The final hearing of the review is set to occur next month; Dominion will have an opportunity to address the overcharging allegations before then.
With Virginians paying the sixth-highest energy bills in the country, it’s hard to believe Dominion is able to get away with overcharging customers. But Dominion’s ability to overcharge is actually a feature of state law — via what’s called an earnings collar, Virginia utilities are permitted to keep a bonus profit of 0.7% above or below the profit margin limit set by the SCC. Dominion’s current profit margin is set at 9.2%, meaning that it’s perfectly legal for Dominion to keep profits greater than 8.5% and less than 9.9% of the established 9.2% profit margin.
Many Virginians are unable to afford these excessive energy bills, implying that state law is currently skewed in favor of public utilities rather than the people.
If the SCC takes recommendations included in the recently filed testimony, it could have the ability to refund a small portion of the excessive rates and have greater discretion in adjusting rates in the future. While the SCC should move to lower customer rates, the General Assembly should pass legislation requiring the SCC to refund to customers 100% of the amount a utility overcharges and give the SCC greater discretion in adjusting customer rates.
These reforms have been attempted by the General Assembly in the past. A bill that would have eliminated the provision of state law permitting utilities to keep a bonus profit of 0.7% above their authorized profit was introduced during the 2021 legislative session. Another bill from this year’s session would have restored the SCC’s ability to set utility rates and authorized profits. A third bill would have given the SCC greater discretion in determining a utility’s fair rate of return and in adjusting customer rates.
Clearly, there is recognition among many legislators that it’s time to rein in Dominion Energy and restore regulatory oversight to the SCC. And encouragingly, all of the bills listed above passed the House of Delegates with bipartisan support. The problem, however, is the Senate Commerce and Labor committee, which killed each and every one of these bills that would have provided relief to all Virginians.
Utility rate relief and the regulatory power of the SCC is bound to get attention during the next General Assembly session. It’s time for state law to work for Virginians rather than utilities. With the next legislative session just a few months away, take a moment to let your state representatives know the law needs to be changed to restore SCC regulatory oversight and to prevent Dominion from continuing to get away with overcharging customers.