Opinions mixed on dealing with excess Dominion Power earnings

Two local state legislators suggested Monday that the General Assembly take a look next year at the law governing the state’s electricity companies. Two others said they’d take a wait-and-see approach.

Their comments followed a filing this month by State Corporation Commission staff that found Dominion Virginia Power earned $523.7 million more than it needed to operate and collect a reasonable profit in 2008. The review of Dominion’s earnings is part of a process that began in March, when the company filed a request to increase its base rate.

Dominion is scheduled to file its response Wednesday. Last month, the company and the Attorney General’s Office proposed a refund averaging about $100 for residential customers to reimburse them for the overage, which Dominion believes is less than what the SCC found.

The law that regulates rates and addresses any company overearnings was passed by the General Assembly in 2007. The law allows the SCC’s three-judge panel to order a refund, which would return less than 60 percent of the extra earnings to customers, or cut the company’s rates going forward without giving refunds for overpayment.

“Clearly we need to look at better ways to allow the consumer to get their money back,” Sen. Frank Wagner, R-Virginia Beach, said of the legislation’s provisions.

At the time the legislation was passed, Wagner said, lawmakers’ greatest concern was subjecting consumers to huge rate spikes, which other states had faced. Since then, a significant drop in fuel prices and the economic slowdown have changed the landscape – and raised different questions for legislators to address in the law.

“Now we have the advantage of having hindsight on it,” Wagner said, “and it’s certainly something we can correct.”

If the company has earned more than it should have, customers should get that money back, said Sen. Fred Quayle, R-Suffolk. He agreed that the Assembly could revisit and alter the law to address new information or concerns about the way its rules have worked.

“There is nothing that the legislature does that cannot be undone,” he said.

All but one lawmaker representing South Hampton Roads in 2007 voted for the legislation. The opposing vote came from Del. John Welch III, a Republican from Virginia Beach who lost his 21st District seat later that year.

Quayle and other local legislators acknowledged that, during the short Assembly session and with many complicated bills presented in 2007, they didn’t understand every nuance of the electricity regulation law when they voted for it. They gave heavy weight to the recommendations of legislative committees and subcommittees, Quayle said.

Sen. Harry Blevins, R-Chesapeake, said the Senate Commerce and Labor Committee convinced him at the time “that this bill was the way we ought to go.”

Dominion officials said any reaction to the SCC review should wait until its rate case plays out. “We are still in the middle of a process that will be resolved by the judges of the SCC, and we see no reason for changes to the consumer protections of the 2007 statute,” company spokesman David Botkins said.

Del. John Cosgrove, R-Chesapeake, agreed that it is too soon to address any action on Dominion’s rates. “The SCC has to look this over and find whether it has overearned or not,” he said.

Sen. Yvonne Miller, D-Norfolk, also said legislators should “wait and see” and defer to the SCC to make the right decision.

“There’s nothing you can do at the moment,” she said, adding, “I’m sure my colleagues and I will discuss it in Richmond.”

Carolyn Shapiro, (757) 446-2270, carolyn.shapiro@pilotonline.com