Former journalist and veteran lobbyist Steve Haner, writing at Bacon’s Rebellion, has a good look at the yearly report the State Corporation Commission has done documenting the hundreds of millions of dollars in utility “overearning” since the Virginia General Assembly prevented it from lowering utility base rates in 2015 (the so-called rate freeze).
The unsurprising news from the report: Dominion Energy, Virginia’s biggest utility with about 2.5 million customers, raked in about $365 million more than it would have otherwise been allowed. The commission said that reflects an earned return of nearly 14 percent.
Dominion’s last approved return on equity in 2013, stemming from the last biennial review the state regulators were allowed to perform of the monopoly utility’s base rates, was 10 percent.
The 2017 earnings will be subject to review by the SCC in the next review in 2021, though per the terms of the big utility regulatory overhaul Dominion pushed through earlier this year, it will be tougher for regulators to reduce base rates and return money to customers, since the company is allowed to offset its excess profits by spending on certain eligible projects.
Appalachian Power, the state’s other large utility, has also benefited from the rate scheme, though its windfall was smaller: about $32 million.
Meanwhile, customers of both utilities have seen their bills increase. The bill for a Dominion residential customer using 1,000 kilowatt hours a months has gone from $90.59 in 2007 to $115 this year. The Appalachian bill for the same usage has gone from $66.61 to $115.62.