RICHMOND, Va. — Dominion Energy, Virginia’s largest utility company, went before regulators Tuesday to ask if the company can take in more profits.
The State Corporation Commission heard from Dominion Energy’s attorneys as well as the Attorney General’s Office’s Counsel for Consumers, U.S. Navy, Virginia Poverty Law Center, Walmart and others.
Dominion Energy is asking to raise the rate of earnings for shareholders from 9.2 percent to 10.75 percent. Since 2011, this rate has gone down.
”The point being that [Dominion Energy’s] reduction has been two and a half times the national average,” Joe Reid, an attorney from McGuireWoods law firm representing Dominion Energy, said.
The general consensus from those opposed is that they don’t want Dominion to make more money or to raise the rates. They argue bumping them up to 10.75 percent would be the second-highest rate increase in the country over the last few years, second to a utility company in Alaska.
This hearing before the commission comes as these regulators recently released a report revealing the company made nearly $380 million in over-earnings in 2017 and 2018, combined. Because of a law that went into effect last year, the company does not have to give that money back in refunds to customers. Instead, it can be put back into the company through capital investment projects, such as renewable energy initiatives and updating the state’s electrical grid.
Dominion also plans to invest roughly $16 billion in capital projects that customers would pay for overtime. The typical residential bill could see an increase of nearly $30 per month by 2023.
Customers who testified were concerned about how high their bills were already high and how increasing investors’ profits make could impact them more. Others were also skeptical about how Dominion Energy has been using funds for renewable energy projects.
”We have a higher energy burden, particularly for low-income Virginians, that’s higher than the average in the country,” Dana Wiggins, of the Virginia Poverty Law Center, said. “We see that impact will have a greater impact on lower-income families whether that’s a senior who’s on a fixed income or whether that’s someone who’s struggling with two or three jobs to just make ends meet.”
But Dominion says customers will see little impact from a change in the rate of earnings.
Right now, the base cost for electricity will not be affected by the case before the SCC. Those rates could change every few years and are currently under review by the commission to consider in 2021.
What customers may notice is a few cents to a dollar tacked onto each bill, which will be lumped in with assets for capital investment projects.
“For every 10 basis points of adjustment in the company’s [rate of earnings], there will be six cents per month in the typical residential customer’s bill is currently around $115 a month,” Reid added.
While this is nickels and dimes, the rate of earning set by the commission will impact any over earnings the company makes.
“Therefore this return can determine whether – or and to what extent customers are entitled to refunds for Dominion’s past over earnings,” Will Reisinger, an attorney representing the VPLC, said.
The commission now has to weigh the wants of consumers and investors while deciding what to do next. A final decision will likely be released in the next few weeks.