By Steve Haner
The General Assembly is moving toward a second method of transferring money from electricity customers who can pay their bills to those who cannot. A Senate bill up today will allow Dominion Energy Virginia and Appalachian Power to simply add yet another “rider” to everybody’s monthly bill for their uncollected accounts receivable.
It is still possible the Assembly will reach into assumed excess profits on the part of Dominion and use $320 million of that to cover payments which have been allowed to lapse during the COVID-19 pandemic. As reported here a while back, that idea is being proposed as an amendment to the state budget, still being written behind closed doors.
But only Dominion has such a pot of cash hanging out there to raid, not the other utilities with hundreds of millions of unpaid electricity, gas, and water bills. And that approach may indeed not appear in the budget after all, leaving Senate Bill 5118 as the main path forward. The link is to the substitute, to which the following was added by a Senate Committee last week:
The Commission shall (emphasis added) allow for the timely recovery of bad debt obligations, reasonable late payment fees suspended, and prudently incurred implementation costs resulting from an (Emergency Debt Retirement Plan) for jurisdictional utilities, including through a rate adjustment clause or through base rates. The Commission may apply any applicable earnings test in the Commission rules governing utility rate applications and annual informational filings when assessing the recovery of such costs.
“Shall” is the key word, of course. If asked, the State Corporation Commission must say yes. And the provision allowing collection “through base rates” in effect does the same thing as the proposed budget language, allowing the SCC to apply any cash the utility has lying around during a rate case. It also could lead to an increase in base rates to cover the unpaid bills. Continue reading
This building remains boarded up, and legislators are not there (except the House Speaker and Clerk, pantomiming a real session on Zoom.)
By Steve Haner
With the Virginia General Assembly’s “Cops and COVID” special session moving into its third week, it seems likely to impede rather than assist the state’s economic recovery from the pandemic. It may also greatly expand COVID-19’s financial burdens in the years to come.
The highly publicized issues of unpaid rents and utility bills, threatening tens of thousands with choices between eviction, disconnection, or years of additional debt, are clearly related to un- and under-employment from the COVID-19 recession. But getting people back to work does not seem the top priority for legislators.
The original stated purposes for the session starting August 18 were to amend the state budget in response to the recession, and make other adjustments responding to the viral disease. Deadly confrontations between police and Black suspects in several American cities, and the violent response, added police and judicial reform issues to the agenda. Continue reading
By Steve Haner
If the Virginia General Assembly orders Dominion Energy Virginia to fork over hundreds of millions of dollars in “excess profits” to cover unpaid family utility bills, who is really paying? We all are, of course. Don’t say you were not warned.
That apparently is the latest approach to help folks behind on their bills, as reported in this morning’s Richmond Times-Dispatch by Associated Press. Governor Ralph Northam is proposing a budget amendment to raid the presumed excess cash at Dominion, after legislative efforts to capture it were defeated in the special session.
Legislative manipulation of the regulatory process, bypassing the independent State Corporation Commission, created the opportunity for Virginia’s dominant electric utility to pile up a possible half billion dollars in excess profit. But the money came from every Dominion customer, a large portion of it from the giant industrial consumers. Only a small part came from those now behind on their monthly bills.
Some legislators see your electric bill as just another tax to be spent on their priorities, not yours. Now they want to use it to pay electric bills for customers who have fallen behind due to a recession (again, a recession in part of the government’s making.) Continue reading
Amounts various Virginia utilities are owed by customers as of June 30, four months after the State Corporation Commission prohibited utility disconnections. Source: SCC
By Steve Haner
During the first four months of the COVID-19 pandemic, Virginians piled up $184 million or more in unpaid bills with several Virginia utilities, and that was before the worst of the heat arrived in July.
The figure comes from a short letter from the State Corporation Commission to General Assembly leaders dated today, listing the totals in arrears as of June 30. The SCC issued an order in March, renewed in June, which prohibited the disconnection of regulated utility customers for unpaid bills during the recession. The order was extended after legislators claimed they would be addressing the problem at the August special session.
The SCC’s order suspending disconnections expires on August 31. That legislative session is now just four days away and no suggestions for a solution have surfaced publicly. No bill on the topic is filed. This issue is not mentioned in a story in today’s Richmond Times-Dispatch listing some of the budget actions Governor Ralph Northam will propose next week. Continue reading
By Steve Haner
Virginia’s two major electric utilities estimate that as many as 150,000 of their poorest residential customers will see their monthly bills reduced next year using money extracted from all their other customers on their own power bills.
Appalachian Power Company projects about 30,000 of its low income customers will receive subsidies of $500-$600 per year. Dominion Energy Virginia projects bill subsidies to about 120,000 households of about $750 per year.
Both companies told the State Corporation Commission recently that to pay for this, about $1.12 will be added to the cost of every 1,000 kWh of electricity used by homes, businesses, and industries in Virginia. The cost per kWh is the same for all customer classes, and thus represents a larger percentage price increase for the commercial and industrial users. Continue reading
by James C. Sherlock
Peter Galuszka’s piece earlier today in this space made two claims the greens offer endlessly trying to achieve what I call truth by repeated assertion:
- The Federal Energy Regulatory Commission (FERC) either did not review or did not review properly (he inferred both) the wisdom and necessity for natural gas pipeline projects in general and the Atlantic Coast Pipeline (ACP) in particular.
- That if it had done so, the FERC would have discovered that there is no market for additional natural gas in the markets to which the pipelines would have brought it.
These claims appear from the usual sources every time any discussion of the ACP is had on this blog. They are both false. I hope this is the last time we will need to read about them.
Mr. Galuszka clearly did not understand the facts.
“So Dominion and its partners could make billions of dollars, some of it paid for by electricity ratepayers, for a project whose public need was always in doubt”
and Continue reading
Virginia and US employment fluctuations since 2004, showing the dip in 2009-10 and plummet in the last four months. Source VEC. Click for larger view.
By Steve Haner
By the end of this amazing year, almost 1.5 million Virginians may have filed claims for unemployment insurance payments, leaving the state’s once-record unemployment trust fund balance of $1.5 billion reduced to $750 million in the red, legislators were told this morning.
That $2.25 billion swing is due to $2.6 billion spent out of the state fund, to cover basic unemployment benefits. To date, the federal government has supplemented that with another $6.3 billion paid to Virginian under special COVID-19 related benefits, which do not come out of the state trust account. Continue reading
Robert L. Johnson on CNBC
by James A. Bacon
Robert L. Johnson, founder of the Black Entertainment Network and America’s first black billionaire, touted a proposal on CNBC this morning to help African-Americans — and, for that matter, all Americans — build wealth through their 401(k) plans. His proposal would make it easier for Americans to carry their employer-based retirement plans from one employer to another.
Sixty-three percent of African-Americans cash out their 401(k) plans when they move from job to job, said Johnson. With “auto-portability,” workers would not have to take any action for their 401(ks) to follow them. Often, owners of small accounts are given the option of cashing out. When they do, they pay various taxes and withdrawal penalties. People still would have the freedom to cash out if they really needed the money, but the administrative change would nudge them into keeping their funds intact and, thereby, boosting their savings.
African-Americans are more likely than other Americans to have small accounts that would be ported from one employer to the next. Over time, Johnson claims, his proposal would put approximately $191 billion dollars into the retirement savings of black Americans (and many billion into the savings of other Americans).
Here’s what I like about this proposal — it’s win-win. Auto-portability is a tool for helping African-Americans increase their net worth, but it’s not a carve-out or set-aside that creates a privileged racial status. Auto-portability would help all Americans with small 401(k) plans but African-Americans would benefit the most. Continue reading
Statue of Gov. Harry F. Byrd on the state capitol grounds.
By Peter Galuszka
Right-wingers in Virginia have been apoplectic for months that Democrats finally captured the General Assembly after years of Republican control.
They also were enraged that the legislature this winter passed a number of reforms that would draw Virginia into the 21st Century such raising the minimum wage, boosting collective bargaining, tightening rules on carbon pollution and raising taxes for cigarettes, a deadly product.
Now such conservatives are using the COVID-19 pandemic as an excuse to throttle or delay such needed reforms. They have banded into groups such as the Coalition fort a Strong Virginia Economy. They have used the Virginia Municipal League’s complaints against the reforms, claiming they cost too much, as a way to derail new measures.
According to the left-leaning blog site Blue Virginia, one of the more extreme advocates for scrambling changes is Dave LaRock, a far-right Republican delegate from Loudoun County. A pronounced gay-basher, LaRock wants to squelch all of the reforms made by the more progressive General Assembly. Continue reading
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Tagged Peter Galuszka
Three of the six electric utilities charging customers to provide others with Ohio PIPP subsidies. Per 1,000 kWh the surcharge to customers is $3.19 for Toledo Edison, $3.34 for Ohio Edison and $2.37 for The Illuminating Company.
by Steve Haner
Both the Virginia House of Delegates and Senate have voted to increase the price of electricity to most Virginians in order to subsidize the bills of low-income utility customers. How much? They have no idea. But the program in Ohio being copied adds from $1 to $3.66 to the price of 1,000 kilowatt hours for those not subsidized.
The Virginia version is even borrowing the name and acronym from Ohio, the Percentage of Income Payment Program (PIPP). The charge in both is called a “universal service fee.” In 2020, the Ohio program will cost ratepayers $301 million to subsidize the power bills of about 275,000 low-income households. The Public Utility Commission of Ohio (PUCO) sets the amount charged in each utility’s service territory and the Ohio Development Services Area transfers the necessary funds to the various electricity providers.
The largest electricity provider in that state of 11.7 million people, Ohio Power, has the highest “adder” on its rates, $3.66 per 1,000 kilowatt hours used. That works out to $44 per year for a residential customer using exactly that amount monthly. A large industrial or commercial user would pay the same rate until monthly consumption hit 833,000 kilowatt hours, when a reduced rate kicks in on additional consumption. The first 833,000 kilowatt hours of usage in Ohio Power’s territory is hit with a $3,050 monthly surcharge. Continue reading
Enrollment trend at Reynolds Community College.
by James A. Bacon
Last month Governor Ralph Northam announced a plan to spend $145 million to make community college tuition-free for low- and middle-income students pursuing jobs in high-demand fields. As justification for this massive entitlement expansion, he cited numbers from Reynolds Community College showing that students who dropped out before completing their degrees “usually had earned a 3.1 grade point average when they left school.” The reason they left, he asserted, was not an inability to keep up academically but a lack of money.
In this post, I questioned the numbers. I didn’t dispute them, but I wanted to know more about where they came from and what caveats might apply before committing to a $145 million spending program. I promised to ask J. Sarge (as we Richmond old-timers still refer to the college) where the 3.1 GPA number came from and report back.
So, I have obtained the information, and now I’m reporting back. Bottom line: Northam got part of the story right, but he drew totally unwarranted conclusions from the data. The justification for the $145 million initiative has no empirical foundation basis.
Let’s see what the Governor said when announcing the program in his State of the Commonwealth speech, and then let’s see what the data is to support it. Continue reading
by James A. Bacon
As legislators ponder the next two-year budget, which incorporates a $2.2 billion-per-year increase in spending (14%) in FY 2022 compared to the current fiscal year, they would do well to take into account a new Medicaid scam.
Medicaid covers expenses categorized as “mental health skill building.” These mental-health services are particularly valuable to the homeless, drug and alcohol addicts, and people coming out of incarceration. Since the enactment of Medicaid expansion, the number of agencies providing such services has increased significantly. And so have the fraudsters who have learned how to game the system.
‘We have seen mental health skill builders drive their clients to our Community Center, sit in the waiting room sometimes for two to three hours while waiting for us to deliver services; meanwhile they are billing Medicaid,” says Sarah Scarbrough, director of REAL LIFE, a nonprofit that serves marginalized populations. Continue reading
Source: JLARC October 7 report on state spending over time, in this case a decade of sustained economic growth with no recession.
By Steve Haner
Every year, the Joint Legislative Audit and Review Commission issues a report looking at ten years of state spending, sliced and diced various ways. In recent years, the headline results have largely been surprisingly consistent and the 2019 report issued Monday fit the pattern. As seen before:
- Medicaid program costs lead the charge, exploding almost 19% in one year due to the expansion that started January 1, 2019, even though the fiscal year was one-half over by then. It went from $10 billion to $11.9 billion. The average annual growth over the decade has exceeded 7% and $600 million.
- Keeping up with Medicaid, and exceeding it in some categories, are the various forms of transportation spending. In the decade since the base year of the report, fiscal year 2010, Virginia has passed both statewide and regional transportation tax increases, and various toll projects have been completed – all flowing through the state’s books.
- The third budget element that has seen major growth is higher education, with the vast majority of the new money coming from tuition, fees and auxiliary operations at the state schools, not state tax dollars. When all the schools are lumped together, their spending growth is right in line with the other two mega programs, and the higher education totals push past the growth in state funds transferred for local public schools. Local public schools don’t charge tuition and fees they can raise at will.
- Virginia’s general economic performance lagged the national average for the entire decade, with average annual gross domestic product growth of 1.4% (versus 2.2% nationally), per capita income growth of 2.8% (versus 3.4% nationally) and labor force growth of 0.9% (versus 1.5% nationally.) The GDP is adjusted for inflation.