Dominion Power defends its billion-dollar handout from ratepayers; squashes dissent; asks for more.

DominionLogoA Senate committee quickly killed SB 1095, a bill introduced by Chap Petersen (D-Fairfax) that could have brought an early end to a five-year prohibition on regulators’ ability to review Dominion Virginia Power’s earnings and to order refunds where warranted. The prohibition, passed two years ago as part of 2015’s SB 1349 (Frank Wagner, R-Virginia Beach), will mean as much as a billion dollars in extra cash to the utility—money that would otherwise be returned to customers.

After losing the vote on SB 1095 in Senate Commerce and Labor, Petersen introduced SB 1593, a bill that would have prohibited campaign contributions from public service corporations like Dominion Power. He was forced to withdraw the bill when Senate leaders complained he had filed it late.

Score two for Dominion. But in case you thought the utility giant might choose to lie low for a while, consider another of this year’s bills: HB 2291 (Terry Kilgore, R-Gate City). The legislation allows Dominion to seek approval to charge customers for billions of dollars in nuclear power plant upgrades. Kilgore has collected $162,000 in campaign contributions from Dominion’s parent company over the years, even though he represents an area of the state that is not served by Dominion Virginia Power (meaning it won’t be his constituents paying for his bill). Astoundingly, the bill passed the House of Delegates with only two dissenting votes (cast by Mark Keam, D-Vienna, and Sam Rasoul, D-Roanoke).

Obviously, there is a pattern here. It actually began at least as far back as 2014, when another Kilgore-sponsored bill passed allowing Dominion to shift onto its customers several hundred million dollars of nuclear development costs that otherwise would not have been recovered for many years, if ever. The legislation inspired much criticism, but little action.

Taken together, these legislative giveaways add up to enormous sums of money. The 2015 legislation involved as much as a billion dollars in customer payments that exceed the profit margin allowed by the State Corporation Commission, according to an estimate offered by one commissioner. In the absence of SB 1349, Dominion would likely have had to issue refunds, lower rates, or both.

At the time, Dominion claimed that the EPA’s proposed Clean Power Plan would impose huge costs on ratepayers unless the General Assembly acted to stop base rates from rising. Legislators weren’t told the real effect of SB 1349 would be to keep base rates from falling. And meanwhile, customers’ utility bills could continue to rise because base rates make up only a portion of monthly bills.

Petersen’s bill this year took notice of the fact that the Clean Power Plan is now highly unlikely to take effect. SB 1095 would have reinstated the SCC’s authority to review rates if and when the Clean Power Plan was deemed truly dead. This misses the mark only in being way too generous to Dominion. As the SCC has pointed out, the review freeze period will be over before the Clean Power Plan is slated to take effect, so SB 1349 could not possibly protect ratepayers from compliance costs anyway.

SB 1349 is currently being challenged in court as an unconstitutional abrogation of the SCC’s power. Two former Attorneys General, Republican Ken Cuccinelli and Democrat Andy Miller, have weighed in on the side of consumers. The current Attorney General, Democrat Mark Herring, was harshly critical of the bill when it was before the General Assembly, but now says he is obligated to defend the law.

SB 1349 passed the General Assembly two years ago amid great confusion about what was in the bill and what it all meant. Legislators padded it out with modest solar-energy and energy-efficiency provisions to make it palatable to skeptical Democrats and ensure it would be signed by Governor McAuliffe.

But this year, legislators have no such excuse. They cannot have missed the torrent of criticism the law inspired, or the point that Dominion won’t spend a dime of its ill-gotten gain on compliance with the Clean Power Plan. It is hard to see the 9-2 vote in Commerce and Labor to kill Petersen’s SB 1095 as anything but a blatant, bipartisan gift to Dominion. (The dissenting votes came from Republicans Dick Black and Stephan Newman.)

Dominion’s corrosive effect on Virginia politics is one of the main threads of a book published last year called Virginia Politics & Government in a New Century: The Price of Power. Author Jeff Thomas outlines a whole host of ways in which Virginia politics have become mired in corruption. SB 1349 is Exhibit A.

Now the unearned largesse for Dominion—and the ignominious end to Senator Petersen’s effort to rein in Dominion’s influence—have become an issue in this year’s governor’s race. Republicans Denver Riggleman and Corey Stewart and Democrat Tom Perriello are all taking aim at the connection between Dominion’s campaign spending and the billion-dollar boondoggle it received from SB 1349. If Kilgore’s HB 2291 passes the Senate this month, they will have another example on which to build their case that Dominion’s campaign donations have corrupted Virginia’s legislative process.

Legislators themselves publicly reject the idea of a causal relationship between the steady stream of campaign cash and their votes in favor of the bills, while privately acknowledging the sway Dominion holds over the General Assembly. Indeed, the comfortable fiction that campaign donations don’t affect a politician’s votes is such an insult to voters’ intelligence that the wonder is why it took so many years to become a campaign issue.

Given Wagner and Kilgore’s leadership roles in the Republican-controlled House and Senate, the issue might not seem like obvious fodder for the Republican primary campaign. Of course, Wagner is also running for governor on the Republican ticket, so the assaults of challengers Riggleman and Stewart might simply be tactics designed to undermine the competition. If voters respond, though, we can expect to hear a lot more discussion of government corruption.

In today’s chaotic political environment, Democrats who don’t speak out could find themselves under fire, too. Lieutenant Governor Ralph Northam, the other Democrat running for Governor, has accepted over $97,000 from Dominion since 2008, according to VPAP.org, and so far seems not to have joined the chorus of voices criticizing Dominion’s influence.

The anti-corporate sentiments that fueled Bernie Sanders’ campaign have only intensified with Donald Trump’s embrace of bankers and oil barons. Democratic voters today are less likely than ever to forgive leaders of their own party for cozying up to big corporations. If either Democratic candidate for governor cedes the issue of clean government to the other—or to Republicans—this might be the election in which it matters.

Tiny Virginia subcommittee tasked with deciding future of bills related to EPA’s Clean Power Plan; meeting set for December 17

Photo credit: Sierra Club

Photo credit: Sierra Club

The EPA’s proposed Clean Power Plan could reshape Virginia’s energy future for the next fifteen years, and possibly permanently. If the state takes advantage of this opportunity, it will reduce carbon pollution, improve human health, save money for consumers, drive job creation in the fast-growing technology sector, and make our grid stronger and more secure.

If the state doesn’t act, EPA will design its own plan for Virginia, ensuring reduced carbon emissions but without the flexibility the state would have by doing it for itself.

This presents a conundrum for Virginia’s General Assembly, which is not known for embracing federal environmental regulations. The usual skepticism was on display on November 19, when the Senate and House Commerce and Labor Committees met in a joint session to take up the Clean Power Plan—or more precisely, to give utilities and the State Corporation Commission staff the chance to attack it.

At the conclusion of that meeting, the two Republican committee chairs, Senator John Watkins and Delegate Terry Kilgore, named three members of each committee—two Republicans and one Democrat from each chamber—to a special subcommittee tasked with deciding what kind of legislative action the General Assembly should take in response to the Clean Power Plan. Kilgore also put himself on the subcommittee, which will now take up any bills that Virginia legislators introduce related to the Plan.

This subcommittee has scheduled its first meeting for December 17 at 1:00 p.m. in Senate Room A of the General Assembly building in Richmond. By law, all committee meetings are open to the public.

According to General Assembly procedure, before anyone else in the entire legislature can consider a bill, it will have to pass muster with these seven men. So who are these hugely important people, and what is the likelihood that they will seize this historic opportunity to make Virginia a leader in clean energy?

The Senate members consist of Republicans Frank Wagner and Benton Chafin and Democrat Dick Saslaw. Wagner and Saslaw were obvious choices given their seniority on the committee and active role on energy issues. Chafin—well, we’ll get to him in a moment.

Frank Wagner is from Virginia Beach and is known for his interest in energy generally, and especially in promoting new projects. He sponsored the legislation that led to the Virginia Energy Plan in 2006 and has been an important supporter of offshore wind development, perhaps reflecting his undergraduate degree in Ocean Engineering and his Tidewater residence.

The General Assembly website says Wagner is the president of Davis Boatworks, a vessel repair facility whose principal customer is the Defense Department. Living in the Hampton Roads area, Wagner is aware of how real sea level rise is; presumably he understands the connection to climate change.

In spite of his interest in offshore wind, coal rules when it comes to funding Wagner’s political campaigns. The Virginia Public Access Project shows coal giant Alpha Natural Resources was Wagner’s second-best donor over the years, with a total of $43,643 in campaign money since 2003, ahead of Dominion Power’s $37,350. Energy and mining interests combined gave gifts totaling $188,152. Of this, $350 came from Highland New Wind Development LLC back in 2008 and $250 came from the offshore wind company Seawind in 2010.

Of course, who gives money to an elected official does not necessarily dictate how that official votes. But it probably should be mentioned that for the 2014 session, Wagner earned an F on the Sierra Club’s Climate and Energy Scorecard, disappointing clean energy advocates who have sometimes had reason to see him as an ally.

Also a low performer on the energy scorecard is Dick Saslaw, scraping by with a D. Saslaw is a career politician who was first elected to the GA in 1976, when he was 36. (He is now 74.) His biography lists his background as an owner and operator of gas stations.

Saslaw is the Senate Democratic Leader and used to be Chair of the Senate Commerce and Labor Committee, until his party lost the Senate. In theory, his leadership position in the Democratic Party should make him a defender of President Obama’s climate initiative. In practice, not so much.

Although he is a Fairfax County Democrat, Saslaw does not share his constituents’ enthusiasm for wind and solar, nor in general, their concern for the environment. Somebody once told him that renewable energy costs a lot; that’s been his story ever since, and he’s sticking with it, facts be damned.

Saslaw is proud of his close ties to Dominion Virginia Power, whose interests reliably predict his votes on any given bill. The Virginia Public Access Project reports that Dominion has given more money to Saslaw than to any other legislator. In 2014 alone, Dominion gave Saslaw $25,000. Over the years, Dominion’s contributions to Saslaw have totaled $240,508, making the utility Saslaw’s top donor.

Saslaw has also received more money from Appalachian Power than any other Democrat–$44,000–even though that utility does not provide service anywhere in his district. In addition, coal interests gave him $90,250, natural gas companies ponied up $50,250, and the nuclear industry chipped in $28,000.

A single contribution of $250 makes up the only entry under “alternative energy.”

This brings us to new Senator Ben Chafin, the Republican delegate from Southwest Virginia who replaced Democratic Senator Phil Puckett (he of the Tobacco Commission scandal). Chafin is a lawyer and farmer, and as his website informs us, “Ben Chafin has a proven record fighting for the coal industry. Ben sponsored successful legislation (House Bill 1261) to fight against Obama EPA’s effort to kill the industry through over-regulation. Ben will continue to work in Richmond to protect coal and grow other Southwest industries like natural gas.”

Not surprisingly, coal interests led all other industry donors to Chafin’s 2013 campaign for Delegate and his 2014 campaign for Senate ($59,000 altogether), though he did pretty well by natural gas, too ($14,150). As a delegate, Chafin earned a gentleman’s C on the Sierra Club scorecard, but it would probably be a mistake to pin our hopes on his becoming a clean energy champion. His role on the subcommittee is surely to give Coal a voice.

On the other hand, Chafin must recognize that the economics of fracked gas and ever-more competitive wind and solar means Virginia coal has no chance of ever regaining its former glory. Southwest Virginia now needs to craft a strategic retreat from mining and work on economic diversification. That’s not inconsistent with the Clean Power Plan.

On the House side—but here I have to digress for a moment to comment on the seemingly random composition of the House Commerce and Labor Committee. The Senate side is bad enough; any Democrat who has evinced environmental sympathies over the years has been dumped from the Senate Commerce and Labor, and when he was in power, Saslaw did a lot of the dumping.

But it’s worse over at the House. The leadership keeps reshuffling its energy committee, as if in a frantic effort to make sure nobody learns anything, while the delegates who actually came to the job with an interest and knowledge of energy never seem to get a turn. Energy law is a hard area to learn. It’s complicated, and if you don’t have time to master it, you are even more likely to accept guidance from either the party leader who tells you how he wants you to vote, or the glib industry lobbyists who assure you they have the public’s welfare at heart just as much as you do. (Plus they give you money!)

So Chairman Terry Kilgore had little enough to work with on his committee. The three delegates he named to this incredibly important subcommittee, though they are undoubtedly smart and hardworking people, bring no discernable expertise on either climate or energy to the General Assembly’s review of the Clean Power Plan.

Well, digression over.

Terry Kilgore himself is a lawyer and a 20-year member of the House from the coalfields region of southwest Virginia. Dominion is his top individual donor, at $122,000, but coal interests together make up the single biggest category of givers to his campaigns, at $243,188, with electric utilities at $218,680, natural gas at $97,830, the oil industry at $16,400, and nuclear energy at $8,500. Just since 2013, he’s taken in over $136,000 from energy and mining interests.

That’s awfully good money for a safe seat, and his votes have reflected it. His energy votes earned him a D on the Sierra Club scorecard. It’s unlikely that he will abandon his coal friends, but like Senator Chafin, he will serve his constituents best if he works to attract new business to his struggling region. Home weatherization and energy efficiency programs would be popular there, and solar energy is one of the fastest-growing industries in America.

The other House subcommittee members Kilgore appointed are Republicans Jackson Miller and Ron Villanueva and Democrat Mathew James. Jackson Miller is a Manassas Realtor and former police officer who has been in the House since 2006. The bills he has introduced primarily reflect his interests in real estate and criminal law, although he also introduced legislation supporting uranium mining. He has received a total of $79,252 from energy and mining companies since 2010, primarily electric utilities, natural gas, coal, nuclear, and uranium. He earned a D on the Climate and Energy Scorecard. Why he is on this subcommittee is anyone’s guess, but certainly Northern Virginia stands to gain a lot of technology jobs if the state develops its clean energy industries as it should.

Virginia Beach Republican Ron Villanueva has not been as popular with the energy and mining companies, whose donations to his campaigns have totaled $20,550. Villanueva’s website says he was the first Filipino-American elected to state office in Virginia when he became a delegate in 2009. Villanueva has been friendly to the solar industry, and while he received a D on the scorecard, he also received an award from the Sierra Club for his work on a bill to provide a tax credit for renewable energy projects. (The bill was converted to a grant in the Senate but not funded.)

Like Delegate James and Senator Wagner, Villanueva lives in an area that is feeling the effects of climate change sooner than any other part of Virginia, so his constituents know how much the Clean Power Plan matters. For that matter, his day job as a partner with SEK Solutions, a military contractor, should mean he’s aware of the Pentagon’s focus on climate change as a national security issue, as well as a threat to its coastal assets.

Portsmouth Democrat Matthew James also hasn’t been especially popular in the energy industry. Since 2009, when he first ran for delegate, he has accepted a mere $5,000 from Dominion, $3,500 from coal interests, and $3,350 from the natural gas companies—token amounts by Virginia standards, but they may be due for a sudden increase.

James does not seem to have introduced any energy-related bills. However, his votes earned him an A on the Sierra Club scorecard. James is listed as the President and CEO of the Peninsula Council for Workforce Development. Maybe he will see an opportunity in the Clean Power Plan to develop jobs in the solar, wind, and energy efficiency industries, which have outperformed the economy generally.

So there you have the five Republicans and two Democrats who get first crack at any bill either facilitating Virginia’s compliance with the Clean Power Plan, or hostile to it. If they like a bill, it moves to the full Commerce and Labor committees. If they scuttle a bill, no one else in the entire legislature will get to vote on it.

That’s how it works, or doesn’t, in the Old Dominion.