Regulators: Dominion’s profits $277 million too high
RICHMOND, Va. (AP) — Virginia’s largest electric utility earned $277 million more in profits last year than what regulators say is reasonable and its customers could see huge bill increases in coming years, state regulators said Thursday in a new report.
The Virginia State Corporation Commission’s report on Dominion Energy comes a year after it reported that the utility made more than $300 million in excessive profits in 2017.
Thursday’s report said Dominion’s return on equity, a measurement of profitability, was 4.27 percentage points higher in 2018 than what the commission said was fair. The data will likely intensify opposition from critics who already have said that the utility’s prices are too high and political influence too great.
Many of Dominion’s big customers, including Walmart and Target, are trying to get legal authority to buy electricity from someone else, setting up a potential heavyweight showdown at the General Assembly next year. And an increasing number of state lawmakers are becoming vocal opponents of the energy giant, prodded in part by a wealthy Charlottesville man — Michael Bills — who is spending millions on a lobbying and public relations campaign to restrict Dominion’s political sway.
“This (report) just confirms the fact that Dominion, year over year, is earning hundreds of millions in excess revenues,” said Will Reisinger, a former assistant attorney general who represents renewable energy companies and consumer advocacy organizations. “If Dominion’s rates were set at reasonable levels, you wouldn’t see all these customers trying to leave.”
Technically under state law, regulators can require Dominion to refund a large portion of overearnings to its consumers. But an energy regulation overhaul in 2018 that Dominion helped push into law gives the company increased flexibility in accounting for costs and virtually guarantees that it won’t be ordered to give refunds or lower rates.
Dominion said the 2018 law is needed to ensure the company can invest in renewable energy, improve the electric grid and other items it says its customers want.
“Reinvesting the revenue identified by the SCC today will enable us to give our customers what they want while also keeping rates low,” said Dominion spokesman Rayhan Daudani.
The SCC’s report also warned that Dominion Energy’s planned $16 billion in capital investments over the next five years could increase residential customers’ bill by 26 percent. That would add $29 more a month for a typical customer.
Dominion has said several factors may mitigate potential rate increases, including lower fuel costs driven by inexpensive natural gas and renewable energy.
The SCC’s report found that the state’s second largest electric monopoly, Appalachian Power, earned $7 million in excess profits in 2018.
Dominion is the exclusive energy provider for most of the eastern and central parts of the state; Appalachian Power for most of the western portions.