Virginia buys Dominion’s pig in a poke

How Dominion sees the bill.

A pig in a poke is defined as “an object offered in a manner that conceals its true value, especially its lack of value.” The expression is said to go back about five hundred years to English marketplaces. A poke was a sort of sack, but why 16th century people bought pigs in sacks, and why they would have bought a sack without looking inside, is not at all clear. I’m guessing the seller was the local pig monopoly, and the buyers were timid leaders who meekly paid their farthings and hoped for the best. After all, that is how we do it in the marketplace of Virginia’s General Assembly when Dominion Energy Virginia comes peddling legislation.

And indeed, the true value (or lack of value) of this year’s boondoggle bill (HB 1558/SB 966) will probably not be understood for months or even years to come. The General Assembly passed this legislation that will govern billions of dollars of new spending paid for by Virginia customers after just a handful of hearings over a few weeks, and with no study or input from outside experts. If you will excuse the expression, this is a lousy way to make sausage.

Arguably, the only thing worse than this bill is the law it seeks to fix, the infamous “rate freeze” legislation of 2015 that simply let Dominion keep a billion dollars of customer money to line its own pockets. You’d think legislators would have learned something about legislating in haste and repenting at leisure.

But the legislation could have been worse. We know this because it was worse; the bills Dominion originally put forward returned even less money to consumers, gave the utilities even more leeway on spending, and included the infamous “double dip” that the SCC said would let Dominion charge customers twice for the same projects. The bills improved over the next few weeks under pressure from progressive Democrats, conservative Republicans, the SCC, the Attorney General’s office, the Governor, and consumer and environmental groups.

Whether it is good enough now remains a matter of debate. Conservatives for Clean Energy and the League of Conservation Voters support the bill, especially the provisions relating to investments in energy efficiency and renewable energy. The Sierra Club, an early opponent, used what leverage it had to get the worst provisions changed before removing its opposition late in the game (while still not supporting the bill). The AG’s Office of Consumer Counsel and Appalachian Voices never dropped their opposition.

Nevertheless, the poke has been bought, so you should definitely take a look at the pig. The Virginia Poverty Law Center and the Southern Environmental Law Center produced a handy summary of the bill’s final provisions compared to both the original bill and the status quo under the 2015 law (and sometimes also to the pre-2015 law).

The summary describes the categories of new spending authorized by the law, but a lot is left to interpretation—Dominion’s interpretation, mostly. Customers don’t seem to have any say in how their money gets spent. They are just supposed to feel happy with the provisions granting them some initial refunds reflecting a portion of the overearnings from past years, plus the utility’s savings from the federal tax cut. Going forward, though, the likelihood of further refunds or rate cuts seems remote. The whole point of the bill is to allow utilities to spend overearnings and avoid refunds. And as always, rates can continue to go up through “rate adjustment clauses” (RACs) like the ones that tacked new charges onto electricity bills even when base rates were frozen.

Moreover, what VPLC’s summary (understandably) lacks is a comparison to what ought to be in there: full refunds based on a review of past earnings rather than legislative guesstimates; mandatory—and much higher—levels of energy efficiency, wind and solar; proper regulatory oversight of rates and spending; and an independent assessment of grid modernization needs rather than blanket permission for a utility to indulge in projects that benefit itself most.

We’ll have to wait until next year for any new legislation, but it is not too early to start laying the groundwork. Governor Northam should direct his administration to begin working with national experts on a comprehensive grid modernization study. The goal should not be to tinker around the edges of current law and policy, but to draft a new and better approach from the ground up. (For a great discussion of why we need this study and what it should look like, see Tom Hadwin’s blogpost from last week.)

Meanwhile, legislators should promise their constituents that they will never again allow a public utility to write our energy laws and force through massive and complex changes over the course of a few weeks of the legislative session. Next time Dominion offers a pig in a poke, the answer should be no.

9 thoughts on “Virginia buys Dominion’s pig in a poke

  1. Have you looked at the proposed 500MW solar facility in western Spotsylvania? There are very many people concerned that the SCC and the County are not taking into the unique human and natural environments in which this project is being sited. All of the other plants in the U.S. anywhere near the scale of this proposed plant are in the SW U.S. and do not present the same problems of runoff, ground water, and so forth. If Spower does everything it needs to do to mitigate or avoid these unique challenges, it may find that the financial advantages of favorable siting near existing distribution networks are offset by increased costs. Those who are promoting clean energy need to help make sure that this extremely large project works for all Virginians, not just for investors.

  2. I’m not very savvy about Virginia energy industry but what is Virginia doing to deal with declining demand and the utility reimbursement model? For example, traditionally utilities are in a rate of return on investments, and with the cleaning demand and distributed energy generation with solar and wind, and may need to invest less in power plants, therefore in the traditional model hindering their ability to make a return on investment.

  3. Good point Daniel Clohossey. What’s happening is that the utilities, led by Dominion, are trying to control things so that they guarantee their high return. That’s why the pipeline infrastructure – they can earn 14% return for 30 years! No other investment makes so much for so long. They aren’t risking that the system won’t take care of them, they’re locking things in by getting our legislature to approve their decisions based on sound bites and trust so they aren’t forced to face experts who question everything.

  4. Pingback: Virginia Buys Dominion's Pig in a Poke - The Energy Collective

  5. I read this Richmond Times Dispatch Article ( just before I saw this one. Her thoughtful analyses of what our legislators (and, soon probably, our Governor) have wrought stands in stark contrast to the jovial atmosphere in the General Assembly. Clearly, the self-satisfied elected officials who put down the utilities’ ratepayers and the State Corporation Commission thought it so hilarious that they awarded one of the bill’s chief sponsors, Del Kilgore, a trophy filled with “cash” and named him a “reverse Robin Hood.” Pretty disgusting.

  6. As a VA rate payer and GREEN advocate (own Tesla, Toyota Plug-In EVs, use solar arrays and a geo-thermal system on my farm) and after having read (and re-read) the details of this 29-page measure, I find far more good than bad.

    The measure’s renewables initiatives, grid modernization, etc far outweigh any SCC-related impacts — frankly, the SCC has not lived up to its consumer advocacy role, has a demonstrated track record for slowing down renewables, grid, and electrical generation initiatives, and has largely devolved into just another marginally-effective bureaucracy.

    We in VA currently pay some of the lowest rates in the country (ranked 34th per the US Govt)- the NRDC, other environmental groups gave either a neutral or a thumbs up to this legislation during the 2.20.2018 House Committee Hearing and the measure will provide required investment to keep our rates acceptable while under-grounding many of VA’s unsightly overhead power lines.

    • There is a reason the SCC has not promoted renewables more and has, generally, no been the kind of consumer advocate we deserve – our legislature has, under direction of Dominion, told them to do that. Legislators have repeatedly demanded of SCC judges that they promise to follow legislative instructions and only speak to the legislature if asked. They now ask SCC staff for an opinion on legislation, nut the only right answer is: The SCC has no position.

      This legislation continues the trend of taking away SCC autonomy and directing it to do what the utilities want. It encourages renewables in the manner the utilities want, not necessarily in the best way for all. Legislators are making decisions they have never considered and have no idea they are making because they accept utility directions and do not understand the minute, arcane, regulatory impacts.

  7. Ivy,

    I love your work, have spent almost 4 years fighting the ACP pipeline and have 68 solar panels on my roof.

    Now I want to make a small contribution to your effort.  Please tell me how to make the check out, where to send it and provide a phone number for my bank’s web bill pay.   (nothing goes to the credit card companies, paypal, or banks and my bank pays the postage.)

    If you put this kind of donation info on the bottom of your messages I suspect you would get a lot of contributions.


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