by Steve Haner

Dominion Energy Virginia has asked the State Corporation Commission (SCC) to allow it to begin collecting the cost of a low-income energy subsidy program, adding a small monthly charge to all its customers.  The application should immediately be dismissed because it fails to recognize how the 2026 General Assembly expanded the program.

At the very least, the SCC should direct the utility to amend its application to reflect the legislative changes that go into effect next January 1.  The participation and ultimate cost of the program are going to expand rapidly under House Bill 884.  The monthly charge Dominion has applied for will not even come close to paying for it.

The program is the Percentage of Income Payment Program, or PIPP, discussed often on Bacon’s Rebellion since the 2020 Virginia Clean Economy Act created it.  It caps the monthly electric bills of eligible participants at ten percent of their income, with the balance paid by increasing the bills of everybody else.  The money also covers past due bills in the PIPP households.

The utility is also dealing with several other major cost increases expected this year – a much higher fuel factor charge, and the need to start collecting a carbon tax from its ratepayers – so perhaps it had reason to low-ball this third bill addition.  It only asked to add 16 cents to that illustrative 1,000 kilowatt hour monthly bill so often discussed.

That is estimated to produce about $14 million in PIPP revenue for the 12 months starting November 1.  But the 2026 legislation, signed by Governor Abigail Spanberger (D), allows Dominion to expend up to $100 million annually on subsidies and administrative costs, if needed.  That is likely to be exactly what Dominion will need to collect. 

Under the new law, the current PIPP eligibility cutoff of 150 percent of the federal poverty guidelines rises to 200 percent of federal poverty.  The monthly electric bill cap, now ten percent of income for people using electricity for heat, drops to five percent.  For those using another method to heat their dwelling, the electric bill monthly cap drops from six percent to three percent.  Plenty of folks not using electric heat are already getting subsidies at the six percent threshold.   

Odds are good that Dominion’s $100 million cap in the law will prove problematic if the program grows as much as it could.  Appalachian Power Company’s PIPP is capped at $25 million per year.  Customers of other electricity providers, such as the rural cooperatives, do not have such a subsidy program. Similar programs in other states also subsidize natural gas bills.

This was one of the few 2026 energy bills likely to increase ratepayer costs that was given a reasonable fiscal impact analysis before the Assembly acted. But the final version just linked, dated March 31, is a radical revision from the original Department of Planning and Budget analysis dated in February and cited in this previous post. 

Hundreds of millions in projected costs mysteriously disappeared in version two, perhaps in part due to the $125 million cap on total program costs.  Both versions, however, report that up to 400,000 Virginia households could be eligible with the higher income threshold.  Both versions were also based on then-current electricity costs, which will continue to rise.

The Dominion PIPP application filed at the SCC May 1 ignores both the original fiscal impact report and the later, skinny version.  It makes absolutely no mention of the 2026 legislation, its broader eligibility or the more generous benefits.  It assumes the program will be unchanged for the next year. 

Dominion had previously charged its customers for the PIPP program, starting well before any benefits had been authorized, and built up a significant cash balance.  By the time the program finally got off the ground about two years ago, that balance was sufficient to cover the initial costs.  That balance is finally being used up, and Dominion now needs to reinstate the charge, Rider PIPP, later this year. 

Based on current eligibility and benefit levels, Dominion is projected that it will provide more than $20 million in bill subsidies in the 12-month period beginning November 1, with another $5.5 million in administrative costs.  That is clearly just fantasy under the new law, which will cover ten of those 12 months.   

There are other interesting tidbits in the application, information Dominion shared at the SCC’s direction.  From the beginning, the PIPP program has been justified as an effort to encourage the eligible customers to go through energy efficiency reviews and upgrades and lower their energy usage.  So far, that has been a bust. 

Of the almost 49,000 customer accounts that have been part of the program at some point since benefit payments started, only 1,600 have gone through demand-side management programs, about 1,100 in 2024 and fewer than 600 in 2025.  On average, doing that reduced their usage by less than 380 kilowatt hours per year, or about 30 kwh per month.

The total energy usage of all PIPP participants went up when October 2025 was compared to October 2025.  This seems to confirm a common criticism of these efforts that some customers use more electricity if the cost is eliminated or subsidized.  The SCC might want to probe that more deeply in the coming review (and it is easy to predict some will want to drop that data requirement if the result continues to show higher usage.)