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.

Now that I’ve read the report and seen the basis, this regular Dominion critic must point out the problems.  As an old campaign hand, rule number one with going negative is make sure your facts are water tight.  Keep the hyperbole to a minimum because if you lose credibility, you lose the game.

First, that “tax” includes far more than the rate impact of all the favorable legislative diktats which have tied the hands of the State Corporation Commission.  Those are a major element of the sums Clean Virginia is pointing to, but then it layers on these:

  • Advertising costs
  • Excessive executive compensation
  • Lobbying, influence, and travel expenses
  • The net cost of the Atlantic Coast Pipeline (Dominion only)
  • Donations to elected officials and PACs
  • Industry association dues
  • Increased energy costs due to a lack of energy efficiency efforts.

Utility accounting is tricky, and not every expense the company makes can be charged back to the customers.   When it can do its job, the SCC often disallows much of those (especially advertising, lobbying and donations) and the stockholders pay for those.  Those cost reviews are a major element of rate cases.

Also, some of those expenses are also related to and supported by profits from other business lines of Dominion Energy’s parent company.  Again, when the SCC does its reviews it can parse those out. (It is a fair point that right now, in response to the utility’s requests, the General Assembly is preventing the SCC from doing its job, but a case is scheduled for 2021.)

The report zeros in on Dominion Energy President Bob Blue’s compensation, an easy way to get a gasp from liberal voters, but normal SCC regulatory oversight would not change that.  I immediately suspected this report was written by somebody who either did not know, or was willing to ignore, regulatory accounting.  Sadly, I was right.

And yes, ratepayers will be covering costs of the Atlantic Coast Pipeline when (if?) it gets built, but to add in an assumed and disputable cost for that in this accounting is just cheating.  And that adds more than $50 to the total “tax” claimed for Dominion customers.

Second, once Clean Virginia identified all the costs it claims (claims) result from the Virginia General Assembly’s meddling with the process, it divides them by all customers.  It ignores customer classes.  The $35 million paid by a shipbuilding company and all the other major industrial users gets averaged in with homeowners.

Again, somebody made a conscious decision to ignore basic facts.  It is easy to find the allocation of Dominion revenue between the major classes (industrial, commercial, residential) and then the average could have been taken off those.  But the numbers wouldn’t have been that high for residential customers, dimming their rhetorical impact.

However, the cost to these non-residential ratepayers still falls to actual Virginians — they ultimately bear the costs of commercial, public authority, and industrial energy bills, whether as consumers, taxpayers, or as stakeholders Virginia-based businesses. As a result, we use an average among all ratepayers to best and most clearly express costs across all Virginians and their businesses,” is the justification provided by Clean Virginia.

(A quick aside:  don’t you love it when liberals use the word “tax” for its pejorative effect and demonstrate they really DO understand that business taxes and costs ultimately pass to customers?)

I’ve spent more than a decade getting more and more concerned and demonstrative about how the General Assembly has transferred decisions to itself and away from the State Corporation Commission, and then made those decisions very badly indeed.  For the first time in 2019, I will be writing about this with no paying client, no stock in my former client, and total freedom to call ‘em like I see ‘em. My goal is to tell you what is being done to you, and it’s up to you whether you care.

The facts are bad enough and no hyperbole is required.

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12 responses to “Clean Virginia: A Powerful Swing That Misses

  1. The biggest indictment here should levied against the Washington Post. Here this self proclaimed world class news organization has yet again become the enabler of a fatally flawed story, peddling bad information to the general public on a vitally important topic.

    Now that the owner of the Washington Post is a high profile player in Virginia with his own personal business reputation on line, perhaps he can bring more reliability, honesty, and a heightened sense of public responsibility, to the Washington Post’s reporting of “local stories” involving other local companies.

    We must all keep in mind that “Democracy dies in Darkness.”
    Those words appear now to be nothing more than false branding to the Washington Post in its modern era.

    • Also Virginia General Assembly and Gov’s are the ones who let Dominion do what they want to. McAuliffe gave Dominion rate freeze the deal they wanted, he said Dominion pleaded they had to have it so he gave in on it. It is really a state government/utility jointly managed monopoly.

      Remember that TV advertzing blitz last year for the latest GA fiasco? Geez I hate it when my rate paying dollars go to lobbying for something I do not agree with.

      But we had that system in NJ too. In NJ we did NOT have the pitbull enviros so over-the-top blasting like Dominion gets. Really vitriolic hatred, and I am confused how or why that attitude developed here.

  2. Thanks for the take-down of the Clean Virginia report, Steve. You’re absolutely right that such amateurish analysis distracts attention from the fundamental issues. And Reed, you’re absolutely right. The Washington Post shamelessly parroted the Clean Virginia claims (although it did get a comment from David Botkins with Dominion).

  3. Steve, I wrote this under another post, before Steve’s post. But likely its one answer, among many, to your question “But we had that system in NJ too. In NJ we did NOT have the pitbull enviros so over-the-top blasting like Dominion gets. Really vitriolic hatred, and I am confused how or why that attitude developed here?”

    It’s always useful to see how many financial investments Green philanthropists hold in their portfolio, how much and in what, if any at all. And also it’s good to now how much money each “Save the Environmental Campaign” raises for those pushing the message, and who benefits therefrom. There are huge amounts of money involved here, $Billions and $Billions of dollars are at stake, converting Dark Money to Green Money. That is one reason Dominion has so many enemies. Many of those enemies simply want to take Dominion’s place, get all that money, $Billions worth of it, for themselves, instead of Dominion. Everybody suddenly now wants to be a public utility, and a university research hospital too. And we know why now. Health and the environment has little to do with it typically. But all’s fair in love and war, right?

    I would also add that now also ideology seems to go hand in hand with grabs for power and money, and that ideology far too often drives the production and slant of bad news stories in the country, particularly by formerly great and reasonable responsible newspapers, local now as well as national.

    • My above comment was addressed to TBill’s question, not Steve’s.

    • What “Dark Money” is being converted into “Green Money”? What “enemies of Dominion” want to take billions of money from Dominion and how? Can you provide some insight into the investments that the Green philanthropists hold in their portfolios and how much money an environmental campaign raises for those “pushing the message”? Some facts would be better than innuendo.

  4. So when Dominion’s opponents do the same thing that Dominion does – play fast and loose with the facts like they do in the IRP – it’s “liberals” acting up?

    hahahahah

    what do you call those in the General Assembly who refuse to make Dominion pay back it’s ill-gotten profits? Rightgeous Conservatives ? 😉

    you guys are so biased it’s funny.

    In your world those who try to hold Dominion accountable, playing by the same bogus rules Dominion and the General Assembly are dratted “liberals”!!!!

  5. What a joke! Talk about a credibility problem. This blog is sponsored by Dominion. Not sure how Haner expects anybody to take him seriously when this “take down” is sponsored by the monopoly. I actually read the clean virgsinia report and nothing Haners writing about here isn’t in the report itself from what I read. It boggles my mind that conservatives are out here shilling for Dominion. Swing and a miss indeed.

  6. To tell the Virginia public they are being “taxed” $254 a year is intentionally misleading, just like the effort described elsewhere to blame antipathy toward gas pipelines on “Russian interference” is pure B.S. Fake news all around. Liars under every rock. Idiots ready to rush to their defense.

    Go back to the search engine and read a half dozen of my BR posts about Dominion over the past six months and call me a shill….Bacon has taken their money, but I have not. I do this for nothing, which means I often wonder why I bother. The lies are always so much more powerful than the truth, all around.

  7. Pingback: Dominion Tool? The GA Is an Entire Toolbox - Bacon's Rebellion

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