All Leader Saslaw Cares About: Is Dominion OK?

Senate Majority Leader Richard “Is Dominion okay with this?” Saslaw

By Steve Haner

Every now and then you can actually see the strings, see the puppet master that is Dominion Energy Virginia calling the shots at the Virginia General Assembly. Senate Majority Leader Richard Saslaw, D-Fairfax, provided a glimpse of its power during a floor debate Thursday.

Republican senators were in revolt. Two days after the House of Delegates had approved a plan to force all utility ratepayers to cover the unpaid bills and late fees for those who have fallen behind, the same language amendment was before the Senate for adoption.

“Once again, we have cast the ratepayers aside here in Virginia,” Senator Richard Stuart told his colleagues assembled in their spread formation at the Science Museum of Virginia. The average ratepayer is struggling to pay their own bill in this recession and did not sign up to pay the bills for those others who for whatever reason do not. “This is immoral. This is not right,” Stuart concluded.

Saslaw was quick to reply. “Taxpayers’ money is also the taxpayers’, and we spend that. This isn’t breaking new ground,” he quipped. Then he asked one of his fellow Democrats involved in the issue, Senator George Barker of Fairfax, “Didn’t the Phase II utility agree with this number?” Yes, Barker agreed, Dominion (The Phase II utility) did agree.

End of discussion! If Dominion has agreed to this, what other consideration should senators have? Leader Saslaw sat down having delivered his message.

Since the beginning of the COVID-19 recession, Virginia utilities – electricity, gas, water, and sewer – have been forbidden from disconnecting customers who have not paid. By the end of June, the various utilities were owed about $184 million, with the bills continuing to pile up since. Under this budget provision the moratorium on disconnections should continue through the winter at least.  The total in arrears is unknown, but eventually will be counted up.

The General Assembly is moving forward with a three-prong approach:

  • Mandatory repayment plans once the emergency ends, from six to 24 months in length, with no late fees or credit repercussions.
  • A mandate that the State Corporation Commission allow all utilities to fully recover the amounts still uncollected (with late fees) from their other ratepayers, probably through a special surcharge on future bills. This also applies to rural electric cooperatives and municipal utility services.
  • For Dominion only, forgiveness for its customers for any accounts 60 days in arrears as of August 31. Those Dominion customers are totally off the hook for those balances. It is estimated that will come to about $74 million. Dominion will get repaid that $74 million in the 2021 rate review process. Absent this, that $74 million might have been customer rebates instead.  (So, yes, it is your money.)

There is a fourth part to this, a provision only in the House so far. The House also takes $120 million from federal COVID-19 relief funds and gives it to the SCC to distribute to lessen the outstanding debts, presumably for more than just Dominion customers.

The vote on this plan was 21-19 in the Senate, along the party line. In the House, the vote was more bipartisan with a final tally of 61-34.

There was a short discussion in the House, but a longer one in the Senate. Frankly, it did not display much depth of understanding of this admittedly complicated problem. Stuart wins the prize for the most helpful comment: This should all be worked out by the SCC through its processes. “We are not qualified to make this decision here today, and that’s why we have the SCC.”

Exactly, Senator, and the qualifications, experience and fairness of the SCC are why Dominion will evade its oversight any chance it gets. Why face actual regulatory risk when you have Saslaw and Barker ready to roll? At the SCC, they fully understand that if Dominion indeed is proven to have substantial excess profits for the most recent operating period, that is because we have been overcharged with the Assembly’s permission.

Senator Jennifer McClellan, D-Richmond, has been an advocate for Dominion’s approach on this, as well. “No matter what, the uncollectable (debts) are going to be collected from the ratepayers. The only question is how much,” she told the Senate before the vote.

That is not true. Some lobbyist whispered that in her ear, and she bought it.

As the House has demonstrated, a substantial part of the COVID relief funds could be applied, and perhaps in the final compromise budget bill will be. Taxpayer money is also being spent on rents that are in arrears.

Also, under current law and rulings, Dominion can earn a profit margin of up to 9.9% before any profits are deemed to be “excess” and eligible for refunds. That is one of the fattest regulated utility margins in the United States and protecting that from this storm has clearly been accomplished (well done, Leader Saslaw, future Governor McClellan).

Why should the utility industry profits sail through this crisis untouched, while others (families and businesses) crash and burn?

Because Dominion is so profitable, it can afford to “forgive” that $74 million to its struggling customers until the 2021 rate case pays it back. That undetermined number of customers get their unpaid balances reduced or even eliminated, if they have otherwise gotten back to paying on time. But no such opportunity is granted to customers of Appalachian Power, the various rural coops, or those behind on natural gas, water, or sewer bills.

Expect Dominion’s unique “generosity” in “forgiving” unpaid bills to be featured in a new series of puffy company advertising as the rate case gets underway in the spring, and then a rash of campaign mailers come October with legislators claiming credit.

Watch the debate on Thursday’s session recording, starting at 1:48.

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38 responses to “All Leader Saslaw Cares About: Is Dominion OK?

  1. Cox is running for Governor and crickets on BR? Or is this the appetizer?

    😉

    • Yep. If nominated, he’s likely to face some Democrat running TV ads claiming they “fought the utility to protect low income families in the pandemic” without mentioning what really happened. “We forced the company to part with its excess profits!” will be the mantra, failing to mention that we all had a valid claim on that money. The RACs we all face to cover the unpaid bills probably won’t start applying until 2022…. surprise, surprise.

      • What was his stance on Medicaid Expansion?

        • He was a supporter of the package agreed to by some House and Senate Rs, and has already been attacked by Amanda Chase for that. Not the topic for today.

          • Was he a proponent of the Medicaid Expansion all along or did he change after it was inevitable?

            If he favored it all along – he’s golden. If he did not – you can be sure opponents probably have some juicy quotes.

            The way the GOP is in Va these days – they’ll probably choose Chase anyhow… and save him that grief! 😉

  2. James Wyatt Whitehead V

    Mr. Haner I watched that and enjoyed the exchange. My that is a huge gavel Mr. Fairfax wields. The cheap made in china plastic folding table might buckle from the force of that gavel. The Republicans put forth the principled stand and were vanquished. Did you know that the Seal of the Senate of Virginia is derived from the Virginia Company of London coat of arms? The Dragon and the Cardinal flank the shield in the center. At the moment the Republicans are the Cardinal and the Dems are the Dragon. The Cardinal is our state bird. The Dragon is from Queen Elizabeth’s coat of arms. The people vs. the crown of Dominion perhaps? Senator McClellan is clever. I see her as the next governor.

    Floreat Senatus Virginiae “May the Senate Flourish”

    • Yes, the great Anglophile Hunter Andrews (RIP) had much to do with getting that registered coat of arms, as I recall. And hooray for the Senate continuing to function as close to normally as possible, leaving the House as an embarrassment. McClellan is actually a regulatory lawyer, which really made it surprising she claimed that all the burden would have to fall on the ratepayers.

  3. “socialized through the tax code”

    hmmm…. that sounds a little like:

    ” “Taxpayers’ money is also the taxpayers’, and we spend that.”

    no? 😉

    • There is difference between giving the company a tax write-off that is spread through the entire economy and imposing a tax simply on that company’s customers with no reference to ability to pay…..but too complicated for most socialists to understand. Doing it the way the GA is going to do it, the big middle class family with the electric bill gets it in the ass….as usual with the libs. The rich guy with his solar panels escapes….

      • did the GOP make that case for the better way?

        I really don’t get it. Wasn’t it the same GA that let Domnion keep the excess profits as well as the tax rebate?

        I’d be okay if the GOP had a uniform approach and made the case.

        Instead, this sounds like just symbolic posturing…semantic games, etc..

        It’s hard to say you want to protect ratepayers and taxpaers this time when all those other times, it was not that way.

  4. Baconator with extra cheese

    Again I blame the worthless Virginia GOP for not providing any type of reasonable opposition or alternative for Virginia voters. They run complete tools, simple as that.
    I am awaiting the rise of non old white guys to form a new GOP. That day will come soon enough with the wake of destruction this new Dem party will bring to Virginia. The asians, Indians, gays, blacks, and latinos that have succeeded economically and now have some money will soon feel they don’t want to pay taxes pushing 50%… and they will become at a minimum fiscal conservatives. Which the GOP needs to accept and drop some of the dumb azz moral majority crap that has made the party obsolete. The Dems will eventually go to far with taxes and the opposition will rise up.

    • The message is that the Dems have moved radical left. I’d posit that the GOP in Virginia is no longer the GOP of prior because it has been torn apart by it’s own right wing.

      That reduces the GOP to playing symbolic semantic games in the GA.

      So here we have Kirk Cox running against Amada Chase and what are Kirk Coxes real chances ?

      If you think the likes of Chase and Corey Stewart are going to attract blacks, Hispanics even Asians into the GOP fold, especially with their positions on health care, – I’ve got some swamp-land to sell yo.

      • I think Kirk Cox has an excellent chance of being nominated. The Republicans will want to have a credible chance of winning the governorship. Except for McAuliffe, if he follows through on his signals to run, and, perhaps, McClellan, those Democrats declaring their candidacy are mostly newbies, with little statewide stature.

        • James Wyatt Whitehead V

          I met Delegate Cox at the YMCA sponsored Model General Assembly. He was one of the only delegates to come and interact with kids at the mock up assembly in the capitol. Retired history teacher with an vice grip handshake.

  5. As Steve knows, not only did Dominion approve of the language, it likely wrote it and gave it to Saslaw, or at least a version that got tweaked a bit.

    Nice post. You have a way of coming up with a phrase that captures the situation and makes the reader smile at the same time. This time it was the Senate “assembled in their spread formation”.

  6. Traditional ratemaking prohibits the recovery of costs from an earlier period in new rates. The past costs can be considered as part of a test year projection of future year expenses. But I would argue that the high levels of pandemic-related bad debt is unlikely to continue into the future at the same level. Did anyone in the GA or VSCC staffs go to law school? Does anyone understand rate regulation?

    As far as Asian voting patterns, the efforts by the Democratic-controlled Fairfax County government to replace the merit-based admissions system yo Thomas Jefferson HS with a stacked lottery system is going to give a lot of Asian-Americans second thoughts about voting D. And most Asians likely have health insurance. Their income levels are the highest in Fairfax County, most especially among South Asians.

    • In terms of Asian votes. Most of the higher income Asians seem to be in NoVa and urban areas. Even if they all voted GOP , it would not be enough to overcome other votes.

      Racial and ethnic composition of NoVa

      55.41% White.
      11.28% Black.
      10.46% Asian.
      0.19% American Indian or Alaska native.
      0.07% Native Hawaiian and Other Pacific Islander.
      0.30% Some other race.
      2.98% Two or more races.
      16.30% Hispanic and/or Latino (of any race)

      It will matter what Kirk Cox says about healthcare, the ACA (if still around) and the Medicaid Expansion – in the urban areas. Even the higher income Asians have adult kids in college and starting out in life.

      And you can be that whatever Dem runs against Cox will exploit the health care issue.

  7. James, I’ve known Kirk since 1985. I was a reporter covering the gubernatorial race, and he was the driver for the GOP candidate as he traveled the state. Then I had a small hand in his 1989 House win. He was also great friend with my parents. Let it be known from this day forth, I’m not unbiased when it comes to Kirk.

    TMT , traditional ratemaking? That phrase has lost all meaning in Virginia these last few years.

    Larry, you are a partisan hack and I will take no political advice from you. Based on your posturing here, you should like Kirk as a candidate. It is a ruse. My prediction is you will troll the hell out of him, and every regular reader expects the same.

    • no hack but I do tell it like it is and if Kirk runs as a moderate who supports health care he can win.

      What I fear is that in order for him to get support from the Va GOP -he will have to toe their line and do their dog whistles…

      If I’m a hack – geeze Steve what be you? listen to you spout the TJ line!

    • so what is it about the following that makes me a “partisan hack”?

      ” It will matter what Kirk Cox says about healthcare, the ACA (if still around) and the Medicaid Expansion – in the urban areas. Even the higher income Asians have adult kids in college and starting out in life.

      And you can be that whatever Dem runs against Cox will exploit the health care issue.”

      what is it about the above that is “partisan”? Or was it something else?

      For the record, when I see something in the paper penned by someone who identifies themselves as TJI – I’m thinking “hack” all the way through it! Wrong? 😉

      • When you’re right you’re right, Larry.

        I had never realized exactly how partisan and unreasonable the TJI is. I did some research on them and do you know what they support?

        They support, and advocate for, limited government, lower taxes, fewer regulations, and individual responsibility! Holy crap! How would the United States of America survive if we ALL thought that way!?

    • “Traditional ratemaking” hasn’t applied to Dominion since at least 1997, nor to the other incumbent investor owned electrics since about 2001.

      The SCC, which does have a legal staff as well as regulatory accountants, economists and engineers, TMT, has applied the principles of “traditional ratemaking” to water, sewer, gas utilities and the electric cooperatives all along.

      Well, not so much the gas companies, they have their own carve-outs now too.

  8. I guess the Republicans in Virginia just don’t have that much money. If they did, a series of TV and radio ads documenting Saslaw’s decades of kissing the ass of Dominion to the ratepayers’ and taxpayers’ detriment would be clearly articulated.

  9. “like it is” – in Virginia – it was the GOP opposition to the Medicaid Expansion that largely lost them the majority.

    then the wacadoodles took over and run folks like Corey Stewart and Amanda Chase.

    Cox would be a refreshing return to traditional GOP – but I still think healthcare is a potent issue and the GOP has a bad habit of insisting on ideology over practicality at times – in the eyes of urban voters in places like NoVa.

    No matter what one thinks as an individual – you have to deal with the reality of the electorate in places like NoVa – which in turn – can control the fate of State level candidates for office.

    that’s just the reality. You can give Cox RoVa – no contest but can he win without taking more than average GOP votes in places like NoVa?

    It’s not “partisan” to point that out.

    • “wacadoodles“

      That’s just about the most non-partisan thing I’ve ever seen posted here. Certainly no personal opinion in that..

      • “wacadoodles” = non-partisan – hard left / hard right –

        good example on left ” defund police” or “medicare for all”.

        wacadoodles will lose the election for you – left or right.

  10. This is how you lose on healthcare (from TJI) aka “let them eat cake”!

    ” ConclusionMost Virginia hospitals are profitable, and many can afford to provide their executives with generous compensation packages. They thus do not require Medicaid expansion to provide care to economically disadvantaged Virginians. The voluntary provision of charity care has deep roots in medical ethics and hospital development. Further government involvement in charity care involves subsidizing profitable investor-owned hospital companies as well as many large not-for-profit hospitals and health systems that earn revenues well in excess of their costs.Some Virginia hospitals are experiencing financial distress most often because they have insufficient volume to cover their fixed costs. If policymakers prefer to avoid mergers and closures among these low utilization facilities, they can support these hospitals directly rather than providing untargeted hospital subsidies through Medicaid expansion.”

    http://www.thomasjeffersoninst.org/files/3/Hospital%20Study%20April%202015.pdf

  11. Why are we talking about Medicaid expansion? It occurred and is not likely to be repealed.

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