Category Archives: Regulation

PG&E Efficiency Program’s Contrary Results

From Opinion Dynamics report on PG&E’s Home Energy Report program, showing most in the program did not change their consumption of energy.

Okay, for the wonks among you: At my request, the State Corporation Commission staff directed me to the full report on Pacific Gas and Electric’s Home Energy Report (HER) Program, which found that more people in the program increased their consumption of electricity and gas than decreased it.

The SCC staff had reproduced two pages of the report in its comments on Dominion Energy Virginia’s proposed demand management programs. I cited their citation at the beginning of a Bacon’s Rebellion report a few days ago. With the original report, I could extract the chart used above, which was used by the SCC staff but with a copy too blurry to reproduce.

Along with the static data for 2016, which is bad enough, the report by Opinion Dynamics also tracked various waves of participants over time and found the trends held: “For electric participants, the percent of negative savers appears to increase annually for all waves. For electric participants, the percent of negative savers increases with duration of treatment.”

 The report never discusses people who increased consumption of electricity or natural gas. These customers are referred to as “negative savers.”   Continue reading

Three Lessons From Dominion’s Income Tax Case

If you thought the tax conformity debate took too long at the General Assembly, check out the fight at the State Corporation Commission over Dominion Energy Virginia’s corporate income tax bill.  The SCC still hasn’t decided how much to cut Dominion’s base rates to reflect its lower income tax payments, but a decision is close.

There are three reasons why this case is worth exploring.

First, a battle over how to account for a small amount, $67 million, is a wonderful demonstration of how obscure phrases buried in legislation written by the utility come back to bite its customers in their wallets.   Continue reading

Fresh RAC Tracker Doesn’t Reflect What’s Coming

Bill impact table included in SCC staff testimony on demand management programs case, showing impact of all pending Dominion requests. Click for larger view.

The State Corporation Commission staff has provided an updated version of a table tracking the possible rate impact of various Dominion Energy Virginia cases pending before the commission, most creating or adjusting rate adjustment clauses (RACs).  It starts with a baseline of $117.64 for the February monthly cost to that famous 1000-kilowatt hour typical customer, who of course does not exist.

The largest cost increases visible on the horizon are not included.

Some of the cases which are tracked have been decided and some are pending.  The table was included in the staff testimony about the proposed demand management programs paid for with Riders C1A and C2A and includes the $0.61 per month increase in them Dominion is requesting.   Continue reading

Virginia Goes Wet With Nary A Whimper

“Dry Messiah: The Life of Bishop James Cannon” by Virginius Dabney

It has only been a century since Prohibition was approved with ratification of the Eighteenth Amendment in 1919.  Is it finally over in Virginia?  For Virginia, a century is but a moment.  Are we rushing this?

A bill is sitting on Governor Ralph Northam’s desk that would not have been successful ten years ago, would have been political suicide fifty years ago and even now deserves attention.  It makes all Virginia localities wet, allowing ABC stories and mixed drinks in restaurants within their boundaries.  The 31 counties that remain dry or partially dry can only maintain their restrictions on demon rum if a local referendum approves continued prohibition.   Continue reading

GA Bills You For Industrial Electricity Discount

The people who make the real decisions about what we pay for electricity in Virginia, which would be the members of the General Assembly, have just cut electricity costs for large Dominion Energy Virginia customers by up to $10 million and shifted those costs over to other customer classes, including residential.

This is yet another small but significant gift to you from the 2018 Ratepayer Bill Transformation Act, which really had little to do with transforming Virginia’s electricity distribution grid.  Dominion’s plans for the grid remain stalled, but this little add-on provision from the same legislation just got approved by the State Corporation Commission on February 8.

Cost allocation and rate design are major points of contention at the Commission sometimes, involving economists, accountants and reams of data.  Now you can just slip a paragraph into complicated bill and bypass all that.

This was ordered by an enactment clause (number 11 of 24) at the tail end of last year’s bill and may be the first example of the General Assembly dictating the fine points of cost allocation among rate categories.   The Assembly is deciding what plants to build, which transmission lines should be buried and when federal environmental regulations are inadequate.  Why not move into rate design? Continue reading

RGGI Debate Continues With New Comment Period

The clock is ticking toward a March 6 deadline if you are burning with a desire to comment on the latest version of Virginia’s proposed Regional Greenhouse Gas Initiative regulation. Perusing the hundreds of comments from the 2018 round of comments, there may not be much to add.

If you liked the first version, you’ll love this revision. If you hated the first version, you will see this one as worse. It is very much the same, only more so – starting with the new beginning target for carbon dioxide emission from power plants of 28 million tons per year, down from the first proposal’s target of 33 million tons per year.   Continue reading

A Third Way for Coal Ash Disposal

EnCAP-IT schematic shows how coal ash can be stored on-site above ground level in synthetically lined cells, or bunkers. Source: “Macroencapsulation: Obtaining on-site clean closure,” Geosynthetics magazine.

By Dominion Energy’s most recent estimate, it will cost between $2.77 billion and $3.36 billion to recycle the utility’s 30 million tons of coal ash or bury it in synthetically lined landfills — as much as $2 billion more than burying it in place. Environmental groups say the risk is justified to offset the risk that toxic levels of heavy metals might leak into nearby rivers and streams.

But what if it were possible to reduce the environmental risks while also slashing the cost to rate payers? Shouldn’t the General Assembly be considering that option?

John Swenson, founder and managing partner of Henrico-based EnCAP-IT Solutions of VA, has developed 12 patents around a coal-ash disposal process he calls macroencapsulation, which combines the cost-efficiency of cap in place with the risk reduction of removal to landfills. He’s frustrated because he can’t get either Dominion Energy or environmental groups to consider his approach. Now a compromise solution backed by Governor Ralph Northam effectively removes the option from consideration.

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When Businesses Welcome Regulations

by Richard W. Hall-Sizemore

The recent news that the General Assembly may not confirm Governor Ralph Northam’s appointment for director of the Department of Professional and Occupational Regulation (DPOR) triggered one of my longstanding complaints. It is not about Jay DeBoer, the beleaguered appointee; I know nothing about his record as director of this agency. My beef is with the agency itself and its role.

The legislative battles over occupational licensing are carried out largely out of view of the public; they do not generate headlines. Furthermore, after the legislative battles are over, the battles over the details, i.e. the regulations, are carried out even further removed from public scrutiny, although they are open to anyone in the public who is willing to put in the time to participate. As arcane as these activities are, they can affect the public greatly. Continue reading

Doctors Without (State) Borders, Coast to Coast

If taken ill traveling in New York or Texas, or any other of the 50 states, odds are you would not question the basic competence of the medical professionals who treated you there.  But consult that same doctor over Skype from within Virginia and state licensing laws might get in the way.

A bill introduced to the 2019 General Assembly, pending now in both the House and the Senate, would eliminate that basic barrier by in effect allowing Virginians to use telemedicine on a national basis, removing the requirement for a Virginia license if the physician or other provider is in good standing where he or she works.

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Bacon Bits: Rider U Screws U Know Who

Now that the State Corporation Commission has finally approved Dominion Energy Virginia’s Rider U, mandated by the General Assembly to force us all to pay for underground lines serving just a few customers, let me explain how perfectly this scheme put the company ahead of its customers.  (For case details, the Richmond Times-Dispatch has this good story, picking up some themes from an earlier Bacon’s Rebellion post.)

Set aside discussions of the “Strategic Underground Program” because the merits do not matter for this illustration.  Start with the information that Rider U is a stand-alone line item on your bill, a financial silo on Dominion’s books, with a guarantee that the utility will recover in full the cost of construction with a profit margin over time.  No risk to the shareholders.

Any benefit to the customers, and there will be some certainly, shows up as reduced maintenance and repair costs and fewer interruptions.  Those maintenance and repair costs are covered by the main portion of your bill, the base rates, outside the Rider U silo.   Say it’s a one-to-one ratio, and the $70 million spent putting lines underground saves $70 million over five years in repair costs.  The fewer interruptions also add base rate revenue outside the silo.

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Clean Virginia: A Powerful Swing That Misses

The full list of elements covered by Clean Virginia’s so-called “Dominion Tax”.  Click to see a larger copy.

Clean Virginia’s recent report accusing Virginia’s two investor-owned electric utilities of annually “taxing” their customers $254 or $89 respectively has a strong basis in fact, and beautifully packages the information, but ultimately is flawed and unfair.

Which is a shame, because the basic premise is correct.  The utility regulation process in Virginia has been badly subverted, the regulators disabled, enriching utility shareholders at the cost of shareholders.   Reading the entire report tells the story of how every well, and I endorse (and recognize) many of their recommendations.   But be very wary of that “tax” figure.

Read the Washington Post’s account and others uncritically and you will assume that you, average residential customer, could be paying $20 a month less to Dominion Virginia Energy or $7 less to Appalachian Power Company.  Those figures might be used in political conversation (such as by somebody’s opponent in a primary) or regularly cited by Dominion opponents in legislative debate.

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Fools Rush In: Coal Ash Scene Setter

Coal ash pond at Bremo Power Station. Photo credit: CBS 19

“I hate to give out directions without knowing what the cost is going to be.  There’s far too much of that in government.” 

That was Senator Frank Wagner of Virginia Beach expressing his deep reservations about various proposals to deal with the 27 million cubic yards of coal ash that Dominion Energy Virginia has collected over decades near its major power plants.  Wagner, who chairs the Senate Commerce and Labor Committee, was part of a joint subcommittee of that committee and its House counterpart that heard testimony  Monday but took no actions.

Legislation is coming.  Coal ash disposal in 2019 might turn into a replay of grid transformation in 2018, an omnibus electric utility regulation bill that takes on epic and expensive proportions as it moves through the legislative process.  It will also be a textbook example of what happens when legislators jump in to make billion-dollar decisions that could be made a better way.

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Green Virtue, Certified By The Hour

Is it enough to be green and virtuous on a month by month basis, or must one be green and virtuous every hour of every day?

That is a facetious version of a real question facing the State Corporation Commission as it considers the most recent effort by Dominion Energy Virginia to create a 100-percent renewable energy tariff for its residential and smaller commercial customers. A hearing examiner who has looked at the year-old case recommended last week that monthly virtue will be enough.

This is a case that pits consumer choice against a utility’s monopoly, and a small window for choice may close if this new voluntary tariff is approved. 

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IRP Rejection Part of a Pattern of Trouble

The State Corporation Commission’s decision Friday to reject the Dominion Energy Virginia integrated resource plan is just the latest sign the energy package sold by the utility to a compliant General Assembly in early 2018 still has an uncertain future.

Two headline elements of the legislation – the promised massive renewable projects and a rebuild of the grid — are in limbo as the 2019 General Assembly looms.  Another headline element, the ability of the utility to use excess profits it is holding to pay for both and thus eliminate risk of rate cuts or refunds, won’t even be tested in front of the SCC until at the earliest 2021, when the utility might (might) undergo its next rate review. Continue reading

“Incomplete!” SCC Sends Back Dominion IRP

SCC Offices on Richmond’s Main Street

The State Corporation Commission today rejected the 2018 integrated resource plan (IRP) filed by Dominion Energy Virginia, stamping it “incomplete” and asking the utility for additional information in a supplemental submission.

The IRP is only a planning document, and the one for 2017 was just approved by the Commission a few months ago.  But in response to the 2017 plan and the massive revision to utility laws by the 2018 General Assembly, several specific directives were imposed for this next plan, which is supposed to have a longer shelf life.  The SCC asserts Dominion failed to comply with some of those directives.

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