The Dirty Deal on Dominion’s Clean Energy Credits

by D.J. Rippert

At least Jessie James used a gun.  Once again, the monied interests of the Richmond business community have used their bought and paid for lap dogs in the state legislature to enrich themselves at the expense of ordinary Virginians.  This particular heist involves charging Dominion’s ratepayers in Virginia increased prices for clean energy costs that don’t provide a watt of new, clean energy in Virginia.  As always, the scam is aided and abetted by the General Assembly.

Before we get to the specifics of this particular robbery, it will be useful to review the basic pattern of General Assembly / Dominion “cooperation.”  Virginia’s state government is one of only four states that have no limits on campaign contributions. Dominion Resources is a huge utility providing electricity to a majority of Virginians. The rates that Dominion can charge are set by state law and regulated by a commission whose members are appointed by the General Assembly.  Now comes the fun part. Dominion is the largest non-party contributor to politicians in Virginia. Dominion has donated $364,750 to state politicians in 2012 alone (and we’re only half-way through a non-election year in Virginia).  Perhaps more stunning, Dominion’s 2012 donations include payments to 70 members of our 140 person state legislature.  It seems that we’re half way through the year and Dominion is half way through the political payouts.  What does Dominion expect to get for all this money?  Lots ….

Dust in the wind.  One recent fleecing of Virginians involves Dominion’s ability to charge higher rates for the introduction of alternate energy generation.  The higher rates are compliments of our benevolent (and well compensated) General Assembly via HB1022 from the 2010 session.  The statute is pretty simple.  If Dominion meets certain renewable energy goals it can collect extra money from Virginia ratepayers.  In fact, the statute is not just simple, it’s simple-minded. Dominion can satisfy its Renewable Portfolio Requirements (RPS) by building renewable energy generation plants or by purchasing renewable energy certificates from other companies.  And here’s the best part – Virginia’s RPS definitions are so weak that the renewable energy certificates that qualify in Virginia wouldn’t qualify in many of the states where the power is actually generated!  The Southern Environmental Law Center says that $1.7 million could buy enough of these certificates to satisfy Dominion’s 2010 RPS targets, qualifying the company to collect an extra $76 million over two years from its ratepayers.

The Treasure of the Sierra Madre Club.  Ivy Main is vice chair of the Virginia Chapter of the Sierra Club.  She has written an excellent opinion piece in the Washington Post describing this fleecing in more detail.  To watch the Sierra Club’s video on this theft, click here.

A Clown Show Hat Trick.  One, our General assembly passes a law that financially rewards Richmond-based Dominion for renewable energy generation that does not require renewable energy or even generation.  Two, Dominion uses the poorly written legislation to trump up renewable energy credits and gets higher rates from people all over Virginia.  Three, Dominion uses some of this ill-gotten gain to remain the largest corporate contributor to Virginia’s state politicians.  Score another one for Richmond’s corporate monied interests.

10 Responses to The Dirty Deal on Dominion’s Clean Energy Credits

  1. This is a fascinating case study of what’s wrong in Richmond. The big question in my mind is whether Dominion slyly engineered this arrangement, knowing from the very beginning how it would be able to game the rules, or whether the rules were slapped together without sufficient thought and Dominion subsequently discovered that it could exploit the rules. Either way, it’s outrageous.

    (I make that statement based on what we know from the Sierra Club op-ed. It doesn’t appear that anyone has asked Dominion if there’s a reasonable explanation. I reserve the right to back-pedal.)

    Of course, this (seemingly) outrageous outcome is the result of instituting a Renewable Portfolio Standard in the first place. It’s the same kind of thinking that led, at the federal level, to Solyndra and a host of mini-Solyndras.

    • GREEN ENERGY IS THE BIGGEST SCAM SINCE PONZI.

      Its been going on for forty years. Untold Billions bilked from the Public Treasury have failed to move the dial on energy sustainability one iota. Instead those billions have been filling the pockets of Green Energy Promoters who lecture, scheme, and preen. These Moral Poseurs, who’re been ripping off generations of taxpayers, deserve time in the Big House.

  2. If one is a bottom-line type person, he’d ask what effect all this apparent skulduggery has on electric rates in Virginia compared to other states.

    My impression is that we have fairly middling rates and a good number of other states have higher electricity rates.

    http://www.electricchoice.com/electricity-prices-by-state.php

    I do not excuse the skulduggery but this is small potatoes compared to other much more fertile ground that could be plowed.

    How much total money is involved?

    if you use that standard with Solyndra, you’re talking millions of dollars.

    if you use that standard with Ethanol, you’re talking 6 billion dollars a year.

    If you use that standard for Medicare Part D – you’re talking 40 billion a year in subsidies.

    none of it is excusable but perspective and context are also important.

    if your goal is to find any/all “inappropriate” things going on between govt and private industry including VPAP donations, you’re going to be one busy guy.

    By the way, Virginia may not have restrictions on campaign finance but Va has what many other states and the Federal Govt do not have and that is a high level of transparency and if DJ tried to find out how much electric utilities donated to campaigns in other states, like Maryland or God Forbid, the national PACS – not so easy.

    Funny how the GOP supported full transparency of campaign contributions until the SCOTUS decision on Citizens United, eh?

    • Virginia does NOT have a high level of transparency in campaign contributions. You’ll note that I cited Dominion as the largest non-party contributor in the state. The two parties and their various leadership funds contribute far more than Dominion. Good luck sorting out who contributed what to these PACs.

      Here’s the Democratic Victory Fund from VPAP. Between 1996 and 2012 this group donated millions and millions to Virginia politicians.

      The second largest donor is Moss for Delegate. Click on Moss for Delegate and see what you get. The third largest donor is Democratic Legislative Campaign Committee. Click there and then tell me about transparency.

      LarryG – you’ve got to quit believing the crap that Virginia’s political elits spouts. There is no transparency.

      http://www.vpap.org/committees/profile/money_in_donors/812?start_year=1996&end_year=2012&lookup_type=year&filing_period=all

    • The point about middling rates is a fair one. However, companies like Dominion don’t get to charge whatever they want because they are very much monopolies within their service area. So, they should charge no more in the regulated area than their actual costs plus an acceptable profit (generally set by the SCC).

      You can give Dominion credit for building reasonably priced generation facilities. However, I don’t believe they are paying a carbon tax on the coal fired generation … yet. Additionally, their nuclear plants are very near an earthquake fault line.

      Dominion may be a coupe of unlucky breaks away from a disaster – either a financial disaster (carbon tax) or worse (earthquake damage to nuke plants).

      However, in the meantime, I’d like to see Dominion and the General Assembly stop padding the coffers of Dominion’s shareholders with unfair proceeds from the rate payers.

    • LarryG – I’d have to get better used to the Maryland web site (it’s not as intuitive as vpap). However, it appears that Pepco has donated less than than $15,000 to Maryland politicians in the fiscal year Maryland calls 2012 Annual. And 2012 is an election year in Maryland.

      https://campaignfinancemd.us/Public/ViewReceipts?theme=vista

  3. that Md web site? is a joke. there are at least two providers of electricity in Maryland. Are you telling me that Pepco donated just 15K ?

    that web site requires you to know what you are searching for before you search and my searches on it did not result in very informative info.

    perhaps it may take some “getting used to” but I’m not sure I trust it .

    In all of your brickbats for Va and the Clown Show – you should from time to time congratulate VPAP and Richmond Sunlight and now Virginia Decoded.

    All three have brought some serious transparency that we’d not have without them and many other states do not have.

    I dare say that if we had Md’s campaign finance “tool” that you’d not be near so able to get the goods….

    :-)

  4. “In all of your brickbats for Va and the Clown Show – you should from time to time congratulate VPAP and Richmond Sunlight and now Virginia Decoded.”.

    I have routinely commended VPAP and Richmond Sunlight. However, I am not sure what they have to do with the Clown Show other than trying to expose the clowns (which they do well).

    The bigger question should be why non-profit entities have to be created to illuminate public information. Why doesn’t the state itself set up the web sites required to allow citizens to view public data?

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