Advocacy group estimates Dominion customers pay a ‘tax’ of more than $250 to company shareholders

Dominion Energy's downtown Richmond building. (Ned Oliver/Virginia Mercury)
Dominion Energy, Virginia's largest electric utility and a major U.S. energy company, is headquartered in Richmond. (Ned Oliver/Virginia Mercury)

Clean Virginia, an advocacy organization, says it has a dollar figure for the cost of “monopoly utility corruption in Virginia politics” for Dominion Energy customers: $254.20 per year.

The report also analyzed prices from Appalachian Power and found customers are charged an average of $89 extra each year.

“Virginians are being taken for a ride by Dominion and an out-of-control culture of corruption in Richmond,” said Brennan Gilmore, Clean Virginia’s executive director.

“We hope this report educates policymakers and the public on the desperate need for a reform agenda in Virginia that returns money to people’s pockets and confronts the legalized corruption of these utility monopolies. Dominion was given a monopoly to provide a public service, not transfer the wealth of Virginians to its shareholders. ”

Clean Virginia analyzed how the 2015 “rate freeze” law and the 2018 Grid Transformation and Security Act allowed Dominion to keep excess earnings each year that would have been refunded to customers. Clean Virginia is the brainchild of Michael Bills, a Charlottesville investor and major Democratic donor.

The report looked excess profits beyond the normal, reasonable rate of return approved by the State Corporation Commission, advertising costs, executive pay, lobbying, campaign contributions, the net cost of the Atlantic Coast Pipeline and increased energy costs due to a lack of energy efficiency efforts, among others.

Clean Virginia also wants to ban utility political contributions, provided suggestions for legislative changes and hopes to encourage the trend of lawmakers and candidates rejecting Dominion political contributions. 

The organization recommended having a regular rate review case by the SCC every two years, changing the calculation of utilities’ rate of return to keep costs low and “ending undue utility monopoly in Richmond,” by capping utility lobbying spending and banning certain campaign contributions by utilities.

“Those of us in public service have a responsibility to make sure this money gets back to Virginia residents and businesses, instead of lining the pockets of wealthy corporations and executives,” said Del. Sam Rasoul, D-Charlottesville.

“In the 2019 legislative session, we will fight to repeal this ‘Dominion tax’ and change the laws that too often allow utility monopolies to write their own rules — to their own financial advantage — in Richmond.”

A spokesman for Dominion told the Washington Post that the group’s findings are incorrect and that the utility’s rates were 18 percent below the national average and 32 percent below the Mid-Atlantic average. David Botkins, the Dominion spokesman, said rates are scheduled to decrease after the first of the year and that ads are paid for by shareholders.

Botkins told the Post the average monthly residential bill is less “less than the large Starbucks pumpkin spice lattes Clean Virginia staff has over the course of a month.”

Earlier this year, the State Corporation Commission, which has found that Dominion has “overearned” in every year since the 2015 rate freeze, noted that the average residential bill for the utility’s customers has risen from $90.59 in 2007 to $115 this year, largely the result of rate-adjustment clauses, or riders, tacked on to pay for various pricey projects.

In 2017, the commission found, the company took in nearly $366 million more than its last authorized return on equity.

The commission, comparing Dominion to a group of 18 peer utilities, ranked the company’s residential rates 11th (with 1 being the cheapest) a drop of four spots from 2006.