Legislation aims to address Virginia’s energy burden crisis by restoring SCC authority
Richmond — Democratic Senators Jennifer McClellan and Creigh Deeds joined Republican Delegate Lee Ware and Democratic Delegate Rip Sullivan today in announcing the Affordable Energy Act (House Bill 1604), legislation that seeks to address rising electricity bills in Virginia. Speaking from the General Assembly building, the legislators outlined their bipartisan bill that reestablishes a fair regulatory process for Virginia’s electric utility monopolies, Dominion Energy and Appalachian Power Company.
- The Affordable Energy Act removes restrictions preventing the State Corporation Commission (SCC) from lowering electric utility rates when the agency determines customers will be overcharged.
- The SCC reports that the current rates of Dominion Energy, Virginia’s largest energy provider, overcharged customers by $152.1 million in 2021 alone. Since 2009, Dominion has overcharged customers by at least $1.9 billion.
- The Affordable Energy Act changes no other part of the SCC review process and does not prevent any funding for authorized projects.
In the 2024 rate case, the SCC will examine Dominion’s earnings and set the utility’s base rate and profit level going forward. Passing the Affordable Energy Act during the 2022 legislative session is the most impactful way the General Assembly can restore the SCC with its traditional regulatory authority in order to protect consumers during Dominion’s next rate case.
“Virginians are facing rising electric bills in large part due to decisions made by the General Assembly years ago limiting the State Corporation Commission’s ability to lower rates it finds are too high. This common-sense bipartisan bill would restore the power of the SCC to protect Virginians from being overcharged on their energy bills. The Affordable Energy Act will help consumers’ pocketbooks and help return balance to electricity rate-setting in Virginia,” said Senator Jennifer McClellan (D-Richmond).
“The goal of this bill is to restore to the State Corporation Commission the ability to review electricity rates and ensure fairness to both the consumer and the monopoly. The Affordable Energy Act is the most important consumer protection legislation that we will have the chance to pass this year,” said Senator Creigh Deeds (D-Charlottesville).
“The legislature is not competent to regulate a major public utility, which is precisely why the State Corporation Commission (SCC) exists. However, owing to unwise legislation in recent years, the SCC has been denied its ability to adjudicate Dominion’s ratepayer charges and rate-of-return on investment. It is only just and prudent that we restore to the SCC the authority to discharge its constitutional duties,” said Delegate Lee Ware (R-Powhatan).
“Saving Virginia families money on their electric bills is not controversial. Or partisan. At least it shouldn’t be. The Affordable Energy Act will do that. It will re-empower the SCC by restoring its traditional authority to adjust rates. It does not mandate any outcome. It simply provides a fail-safe ability for the SCC to determine fair and reasonable electricity rates, while preserving the utilities’ ability to recover costs and earn a fair rate of return. I look forward to working with my colleagues on both sides of the aisle, and in both Chambers, to get this bill to the Governor’s desk,” said Delegate Rip Sullivan (D-Fairfax).
The Affordable Energy Act has attracted a broad coalition of support. Americans For Prosperity, Southern Environmental Law Center, and the Virginia Poverty Law Center all voiced their support for the Affordable Energy Act:
“American for Prosperity applauds Governor Youngkin’s administration for rightfully identifying the soaring electricity costs for Virginians. Families are struggling and making trade-offs between buying food and paying rising energy bills. Restoring the independent oversight of the SCC is the best approach to ensure monopolies that overcharge rate payers are kept in check and untouched by political influences. It’s time for lawmakers to put an end to the monopoly giveaway at the expense of hard-working Virginia families,” said C.J. Sailor, State Director at Americans for Prosperity Virginia.
“The bedrock principle of utilities is that in exchange for exclusive territorial rights, monopolies must operate under price regulation. For too long in Virginia, that principle has not applied. This bill simply restores the balance and ensures that the State Corporation Commission has the power to prevent monopolies from overcharging customers,” said Will Cleveland, Senior Attorney at Southern Environmental Law Center.
“The problem with Virginia’s electric utility model is quite simple: electricity in Virginia costs more than it should. If passed, the bipartisan Affordable Energy Act will restore an appropriate balance between the interests of customers and monopoly public service utilities to provide savings to ratepayers,” said Dana Wiggins, Director of the Center for Economic Justice at Virginia Poverty Law Center. “Over the past decade, the General Assembly has enacted sweeping, controversial policy changes to utility monopoly regulation at the behest of the utilities. These policies have enabled the utilities to overcharge customers above a legally authorized profit margin repeatedly and then shielded those excessive profits from oversight. When considering any changes to electric utility policy during this legislative session, the General Assembly must begin the discussion by asking, ‘is this good for ratepayers?’”