More rate adjustment clauses (RACs) on your power bill than points on this buck? Soon.
Here they go again, using your electric bill to pay for government spending programs and blurring the distinction between utility costs and taxes.
Everybody heard Thursday about that new coal ash management program adding to the pantheon of rate adjustment clauses (RACs) driving up electricity bills. Later in the day, with far less notice, a House of Delegates subcommittee approved yet another RAC and allowed potentially major new costs to inflate an existing one.
House Bill 1840 was the first RAC bill approved by a House Commerce and Labor subcommittee Thursday afternoon, asking ratepayers to pay unknown sums to build transmission lines to empty economic development “business parks.” Just how much spending on this speculative investment is planned is not mentioned in the attached fiscal impact statement and was not discussed in the meeting by advocates.
Transmission lines heavy enough for major industry are not cheap. The challenges the state faces finding tenants for mega-sites, “despite hefty spending” are well documented by the Associated Press in Sunday’s Richmond Times-Dispatch. Now the ratepayers may join in the hefty spending.
This bill was pushed by Appalachian Power Company, and its spokesman complained its industrial usage is dropping. The goal is to lure industries into those empty potential locations, with the utility service ready to go. “We’ve got to bring some industrial load back into our service territory,” APCo lobbyist Ron Jefferson said. (What’s wrong with your stockholder’s capital, Ron?) He was followed to the podium by a platoon of local government officials, ecstatic this was being done without them having to use their own local taxes.
While APCo was leading this charge, this is a statewide bill including energy cooperative territory and will have statewide economic impact when the SCC follows the General Assembly’s diktat that transmission lines to empty business parks must be an allowed expense under the existing transmission rate adjustment clause. This follows last year’s diktat about an underground transmission line for an Amazon facility.
The second proposal authorizes a new and separate rate adjustment clause, for all customers of APCo and Dominion Energy Virginia, to provide broadband services in the under-served portions of their territories.
From House Bill 2691:
- Notwithstanding the provisions of § 13.1-620, such an investor-owned utility may, either directly or through an affiliate or subsidiary, pursuant to a pilot program that the Commissioner approves pursuant to this section, (i) own, manage, or control any telecommunications equipment, including any plant, works, system, lines, facilities, or properties, or any part or parts thereof, together with all appurtenances thereto, used or useful in connection with the provision and extension of such broadband services; (ii) become licensed to provide broadband services in an unserved area of the Commonwealth; or (iii) lease such telecommunications equipment to other providers of broadband services in an unserved area of the Commonwealth.
The bill caps the program at $60 million per year for one utility but imposes no cap on the other. It’s the Phase II utility that gets the cap. You need to know which utility is Phase I and which is Phase II. You know which is which, right?
The fiscal impact statement breaks the code and notes its Dominion that is capped at $60 million per year. The same Dominion which will be authorized to collect that additional $225 million a year for coal ash disposal and recycling. And the now untold millions to build power lines to various business parks, only some of which will win new business.
“Ultimately if this works it could reduce the rates” said Dominion lobbyist Jack Rust. “That’s what our studies indicate.” Only the costs in excess of revenue will be charged to ratepayers through the RAC. If broadband service in these areas was easy and quickly profitable, the lines would be there now, wouldn’t they?
The General Assembly is considering ordering you to invest in a speculative expansion of broadband to rural areas, overcharging you for electricity to raise the capital, and guaranteeing the profit to the utilities while protecting them from any loss. Ten House members have already voted for this.
“Any persons wishing to speak against these proposals?” the chair asked on both bills. Ivy Main, on behalf of the Sierra Club, rose to speak alone, and only against the one running transmission lines to business parks. You can see how little the SCC had to say, in those feckless fiscal impact statements.
The Republican legislators on the subcommittee will tell you to be happy they defeated a Northam Administration proposal to spend all the carbon tax money from the coming alliance with the Regional Greenhouse Gas Initiative. (Again, this will be another column on another day.) But the defeat of that spending plan won’t stop the carbon tax from appearing on future electric bills, and another House bill that would stop the carbon tax will be vetoed.
Earlier Thursday, some of the political leadership gathered in the Patrick Henry Building to celebrate the bi-partisan agreement ordering various outcomes to the dispute over coal ash disposal with Dominion Energy. The company’s ratepayers were told to be pleased – thankful even – it will only cost them $225 million per year and will add no more than $5 to the monthly bill of a “typical residential customer.” With friends like these…
The draft substitute for Senate Bill 1355 fails to define “typical residential customer” and that question alone is going to flummox the SCC. Limits for the monthly impact on “typical commercial customers” or “typical industrial customers” were noticeably lacking, and none of them will pay only $5 a month.
Put all four of these together – coal ash, carbon tax, business park transmission lines, and a major broadband initiative – and it is easy to imagine the day when the generation and delivery of your electricity accounts for less than half of your bill, and the rest is just open or hidden taxes or subsidies.
