The Virginian-Pilot
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A state regulators’ review of Virginia Natural Gas’ finances has found that the company earned $15.3 million more than it needed to operate its system and earn a profit in 2008, while its spending to repair and maintain that system declined.
VNG submitted its Annual Informational Filing to the State Corporation Commission in July last year. It is required to provide the information while its rates remain frozen until July 31, 2011. SCC staff studies the company’s earnings to determine whether they reflect what the commission has deemed reasonable.
The commission's staff filed its report last week, two months after releasing an assessment of Dominion Virginia Power’s 2008 earnings that concluded the electricity company earned about $500 million more than it should have. Most local consumers receive their electricity and natural gas service from Dominion and VNG, respectively, as the two largest energy providers in Hampton Roads. VNG has more than 260,000 customers.
VNG officials wrote in an e-mail that they disagree with the staff’s findings and believe the company is earning less – not more – than authorized.
"State Corporation Commission staff made various adjustments, including adding revenue that VNG did not even receive during the review period," wrote Tami Gerke, a company spokeswoman, in the e-mail. "Virginia Natural Gas does not believe that the staff’s calculation is reflective of the company’s actual financial position or consistent with previous commission orders and policies."
The company plans to file a formal response to the commission on Feb. 16.
VNG’s has had the same rates since 1996, not including its cost to buy the natural gas itself. That cost is a separate charge on monthly bills. It is passed to customers with no markup for profit and can fluctuate based on wholesale fuel prices.
In 2005, VNG filed a request to the commission to raise its rates, saying it needed an additional $19 million in annual revenue. At that time, the company also proposed an alternative plan to freeze rates for five years. In exchange, it offered to build an underwater pipeline between the Peninsula and South Hampton Roads to ease congestion on its existing system and help lower costs in the future.
In its review of the company’s finances in 2005, commission staff concluded that VNG was earning $9.8 million a year more than it should. Nonetheless, the commission agreed to freeze its rates, deciding that the pipeline project would provide greater long-term benefits for consumers than a relatively small rate decrease.
VNG’s rates cover its costs to operate its system, plus a return on equity – a profit on its investment in pipelines, equipment and other assets.
In 2006, when the commission agreed to VNG’s rate freeze, it allowed the company a return on equity between 9.5 percent and 10.5 percent. This month, the staff report found that VNG had earned a 15.2 percent return on equity in 2008.
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No surprise
This is going on across the country: power company after power company is trying to squeeze more profits to satisfy their stockholders even if it goes against state regulations. The companies are doing their best to lobby, cajole and sweet talk regulators into allowing them to have more money than what they agreed to in previous negotiations. The down side is, in many states they'll get away with it. Regulatory commissions won't stand up to them so they'll get their added profits. Once they get their way one year, they'll try it again and again until some of the people on the commission have enough guts to stop them. Until power monopolies are eliminated and there is actual competition between companies to provide power to homes and businesses, this what regions like ours will be faced with, year after year.
Not surprising
To me at ALL. My gas bill goes from $15 in the summer to over %100 in the winter. I do have gas heat, but I keep it set on 66. I always hate to see winter come just because of that. But, like with Dominion, we will never get a penny of our money back. They will just "cut" the rates back.....for now.
maybe a check with a dictionary
will allow you to see fascism and socialism is exactly the same thing. This is exactly why so many folks are now confused, they think their political philosophy is somewhere in the middle. Unfortunately our government run schools have been indoctrinating our youth to believe all these government controlled programs are middle of the road ideas. The sad truth is there is no longer a center-left contingent in our political spectrum. The Democrats have fully moved to believing in central planning and government dictate and individual mandates.
fascism: "A governmental system with strong centralized power, permitting no opposition or criticism, controlling all affairs of the nation (industrial, commercial, etc.)" (American College Dictionary, New York: Random House, 1957).
socialism: "a theory or system of social organization which advocates the vesting of the ownership and control of the means or production, capital, land, etc., in the community as a whole" (American College Dictionary).
Different definitions
This is funny to me: if the two words actually meant the same thing there'd be no need for two different words. That, and I can't say I've ever heard of that dictionary. The third strike is using a dictionary that is 53 years old! One of the greatest powers of the American language is that it does change and adapt over time. Lexicographers and English teachers know this only too well. Schools at any level rarely keep dictionaries that are more than eight years old. Colleges insist on students using ones that are no less than three years old. That's why new dictionaries are printed every year.
'Unfortunately our government run schools have been indoctrinating our youth to believe all these government controlled programs are middle of the road ideas.' That might be fine for the conspiracy theorists, but it doesn't cut it in the real world. There is no 'indoctrinating' of students: anyone who is familiar at all with the America so-called education system can tell you that. There is no one set system. It is more confused than anything else.
Hold On
There are many types/schools within Socialism. What you state is an oversimplifcation of the reality. There is: Democratic Socialism; Social Democracy; Social Anarchy; Libertarian Socialism, and even sub-divisions such as Arab and Irish Socialism. Some believe in stronger govt controls and others believe the market should play a larger role. You have a right to believe what you want but saying Dems want to put govt in control of everything is a fruitcakish as those who said Bush and the R's wanted a Fascist state due to all the govt secrecy and breaking of laws. We have checks and balances that would prevent the structure of our govt from forsaking the Constitution and converting in such a manner. The schools statement sounds like a conspiracy theory. You are no doubt saying that public teachers and administrators are all socialists who brainwash children in order to effect a new world order in our country. Show me some proof of that one!
What on earth is the state
What on earth is the state doing determining corporate profits? And we still have people saying there's not enough regulation in this country? It is clear - government controls business in this country - and that's called fascism (look it up if you went to public school). We haven't seen a free market for decades. If our educational system hadn't been nationalized, maybe our populace would know that competition is the only real way to level prices - not regulation. Maybe then we wouldn't be the lemmings our newspapers have pushed to radical leftist extremes for generations. Our efforts should be focused on creating a prosperous business environment, with low taxes, where competition will reign, rather than taxing the hell out of everyone while looking at business enviously like some greedy Soviets chanting 'down with the bourgeois.'
Don't think so
Fascism is where corporations have more say in government and are even involved in making government policy. Socialism is where government controls the means of production and distribution of goods and services. That's was from my high school government classes and reinforced in college and from political science dictionaries and books too. Right now, corporations have more control in America than at any time since the late 1800's and early 1900's. Those same said companies don't want a free market economy but monopolies where they can control all pricing without competition. If you don't think so, just look at all the consolidation and mergers we've seen over the last twenty years. Our education system certainly ISN'T nationalized: you go to different states, even different school districts and you see classes being taught differently with different books and materials.
You're doing a great job of spouting the corporate message the CEOs want everyone to believe though.
It's a monopoly
It's because it's a regulated monopoly. The problem is the government accountants are the people that couldn't make it in the competitive world, so they mess is up all the time. The claimed overstatement of revenue is highly likely.
There you go
again, insulting people with learning the facts. How do you know they can't compete? How do you know they're not up to the job? And here you are supporting the Company's position. How do you know they're right? And for the record and full disclosure how much stock of VNG do you own?
meant to say
without learning the facts. sorry