Dominion ❤ New Utility Bill Payment Plan

This time you get touched.

By Steve Haner

Dominion Energy Virginia loves the General Assembly’s most recent proposal on how to deal with mounting unpaid utility bills in the COVID-19 recession. You might not.

The state’s dominant utility has activated its network of grassroots lobbyists (including company retirees and stockholders) to express their personal support to their hometown delegate and senator, in an email that a recipient shared:

Last week the Senate Finance and House Appropriation committees passed budget bills that included assistance to those utility customers who have experienced economic hardship due to the ongoing COVID-19 pandemic. All utilities have been impacted and the legislation recognizes that relief to those citizens most at risk will be different from one region and utility to the next. The direction adopted by both Chambers have been consistently supported by Dominion Energy…

As predicted more than once, the unpaid bills ultimately come to all utility consumers. The approach outlined in the new budget language is a variation on earlier themes, but the bottom line is unchanged.  

The House of Delegates also has voted to put $120 million from federal COVID-19 funds toward the unpaid utility bills, but that move reduces the burden on the families which owe the money. It reduces the amount they will need to pay back, but anything they do not pay back still will ultimately land on other ratepayers.

The budget language is almost identical in both the House and Senate proposed amendments, a sign that the utility lobbyists were successful in peddling their version. As it now stands, the moratorium on utility disconnections during the COVID-19 recession will extend until the Governor says otherwise, or until 60 days after the official emergency period ends. That could be first or even second quarter 2021.

Those still in arrears will be offered payment plans extending from six to 24 months. Utilities cannot report to credit agencies that the customers are behind.

And then, mirroring legislation outside the budget previously reported, the State Corporation Commission is ordered to:

… allow for the timely recovery of bad debt obligations, reasonable late payment fees suspended, and prudently incurred implementation costs resulting from a Repayment Plan for electric, gas, water, or wastewater utilities, including through a rate adjustment clause or through base rates.

Note: “…reasonable late payment fees suspended.” The customers won’t pay a late penalty, but the penalty they don’t pay is added to your bill.

As sweet as that is for stockholders, Dominion’s lobbyists were not done and have added a special provision to protect its finances through the repayment process. It is so clever and complicated that the following interpretation is tentative, but this is what I see.

Any “Phase II utility” (that is legislative secret code for Dominion), “(w)ithin 60 days after the enactment of this act … shall forgive all such utility’s jurisdictional customer balances more than 60 days in arrears as of August 31, 2020.” So, they forgive some of the debts. That’s good, right? Keep reading:

In the utility’s 2021 triennial review, any forgiven amounts shall be excluded from the utility’s cost of service for purposes of determining any test period earnings and determining any future rates of the utility. In determining any customer bill credits, in the utility’s 2021 triennial review, the Commission shall first offset any forgiven amounts against the total earnings for the 2017 through 2020 test periods that are determined to be above the utility’s authorized earnings band. Such offset shall be made prior to any offset to customer bill credits by customer credit reinvestment offsets.

Translation: Dominion will not count the unpaid balances forgiven as of August 31 against its expenses. It will instead use them to reduce the value of any customer bill credits or credit reinvestment offsets that the State Corporation Commission might otherwise order. This is a back doorway to do what was originally proposed, to tap into the expected “excess profits” the SCC may recognize and capture in that review. Dominion gets repaid in full with your money.

And, as noted, this disconnection moratorium might extend well into 2021, so whatever is still not collected by Dominion through the rate case and the repayment period is still eligible for a rate adjustment clause. Again, the company is well protected.

The folks over at Clean Virginia exploded over the budget language when it appeared, complaining it didn’t just directly transfer the excess profits from the utility to the struggling customers. Well, it is confusing, but in effect that is still likely to happen. It will just take a little longer and be a bit harder to trace.

This is not final until there is an approved conference report signed by the Governor. Some in the House Tuesday pushed back, seeking the direct raid on the presumed excess profits. The amendment sparked some debate and opposition today but passed 61-34. The Dominion lobbying brigade did its job, and presumably moves on to the Senate.

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56 responses to “Dominion ❤ New Utility Bill Payment Plan

  1. “Reach out and stun someone”

    Apologies to AT&T

    • I like it.

      I wasn’t aware until now, but Attorney General Herring (a.k.a. Virginia’s Consumer Counsel) has also weighed in publicly, with a letter to the Assembly dated today. He opposes what Dominion just shoved through, but instead returns to the Governor’s original proposal to simply grab the presumed “excess profits” and apply them to the unpaid bills. Letter linked below:

      https://www.oag.state.va.us/files/2020/AG-letter-to-House-and-Senate-re-DOM-Arrearages.pdf

      Sorry, that that is still 1) ultimately charging the other ratepayers for the unpaid bills and 2) works only for Dominion, not the other utilities swamped with unpaid bills. Not helpful.

      • Well, easy enough to fix 2. Just take DomVa excess profits and spread it to the other utilities based on their losses to unpaid bills.

        As to #1, what if it were water? Or oxygen? Just pretend, and if necessary, hold your nose.

        • It is common practice for people whose homes or businesses are connected to a public/community water system to have their water service turned off for failure to pay their water bill. Or, at any rate, it was common practice prior the the pandemic.

          As far as oxygen goes, Dominion has not yet figured out a way to charge for it, and the government has not yet figured out a way to tax it, so the consequences of non-payment are not yet known – although I have a feeling they could be severe…

      • So for the cooperatives, in theory, the “investors” are the ratepayers and they too will absorb the losses.

        So much simplier that all the rabbit-hole stuff for Dominion!

        Dunno about AEC…

        Steve seems somewhat infatuated with all things Dominion when it comes to energy/electricity in Virginia even though Dominion is only about 1/2 the state if not mistaken.

        As a matter of necessity – that some might contest – people cannot be put out on the street nor can their electricity be shut off in the pandemic.

        The options for who pays instead are pretty limited.

        Sometimes I get the impression that Conservatives like Steve in their heart of hearts WOULD cut off folks eletricity and/or put them on the street. Never heard any thoughts to the contrary – just grumps that others should not have to pay.

        We did have a fair number of folks get the stimulus money that did not need it. Some of them promised to spend it to “help” others… hmmm

        • Sometimes I get the impression that liberals like Larry in their hearts would have the government take over and provide these services, at no cost to the “deserving,” and get straight to full socialism.

          • Not sure where you got that! but my view is that this country, it’s society doesn’t like seeing moms with kids and the elderly living on the streets in cardboard boxes, etc and as long as that is true – we’ll tax each other to provide a safety net. It’s not unanimous by any stretch, there are those who would do so but they won’t advocate actually putting them on the street, they argue instead that they shouldn’t have to pay for them – that’s it’s “wrong”.

            It’s the same thing with food and medical care – Medicaid AND Medicare. How many seniors in this country would have insurance and not lose all those savings if it cost what insurance comanies would charge for older people?

            Even as “other taxpayers” pay for us seniors, we still talk about “taking money” to pay for others… even if the “other” is ourselves and we’d be broke or dead if not for Medicare.

            Is that “liberal”? We can vote not do – as a country. I’d sure abide by that vote and yes, some on the right would do just that but I suspect their numbers would not include those seniors who essentially uses others tax money to help pay for teir Medicare.

            It’s basically what virtually every developed country on the planet does. People live in massive slums in 3rd world places not 1st world and yes, of course, the money to do has to come from others – those who are more fortuate.

      • Those now in arrears could well have contributed to the excess earnings, Steve. You are right that this would only work for Dominion customers.

  2. Does this work the same way for the other utlitiies in Virginia?

    Did they also have “excess profits” that willl be redeemed as help for some?

    From a practical perspective, does anyone think the investors of Dominion should eat this?

    Seems to me that Dominion has an essential deal with the state. They provide sufficient reliable electricity at a guaranteed profit. All other costs are on the state.

    no?

    • Welcome to Virginia, owned and operated by VEPCO….with Larry’s blessing!

    • All that Phase II utility stuff applies ONLY to DVP, Larry. The rest of the bill sets up repayment regimes for all utilities. There will almost surely be unrecovered bad debt for many providers, other than DVP.

      • dumb question. How does a cooperative deal with “unrecovered debt” if they really don’t be generating dividends for “investors”? Doesn’t that effectively mean the member/ratepayers will eat it?

        If non-Dominion rate-payers end up eating this debt, is it unreasonable to expect DVP ratepayers to do any different?

        isn’t this sort of a tempest in a teapot except for those that don’t want to pay? 😉

  3. Looks like Covid wasn’t a hoax after all…magically disappearing any day now.

  4. There are lots of houses heated with propane.

    Propane suppliers are under no legal requirement to continue deliveries without being paid.

    Expect that many of these houses will instead be heated with space heaters.

    Expect more electrical fires this winter.

  5. One comment struck me was the suggestion Dominion using retirees and stockholders to lobby. I am struggling with that. I have had some push back from a stockholder here. Maybe I need to buy me some D stock and just get over it.

  6. Be thankful you have VEPCO and not PG&E.

  7. There are no easy answers to this. The best approach to me would have been for the Congress to agree on continuing enhanced UI benefits, so people could stay current. I also have no problem with using the COVID response funds for this. But the blanket moratorium on all disconnects was a market signal I worry too many followed. And now it may last through the winter.

    But this approach — send 100% of the unpaid balance, with late fees, to all the other customers in a surcharge — is basically a tax. Of unknown amount — TBD. You may agree or disagree with it, but call it what it is. And notice that it is getting by under the MSM radar. You have ONLY seen this discussed and described here, so far.

    And even in Bacon World, the story is being swamped by the UVA angst over a stupid undergraduate who is proudly crapping where she eats. Man, you should see the readership stats on that stuff, off the charts….

    • Methinks Steve is engaging in the proverbial “tax-the-man-behind-the-true rheotoric!

      Yes… it’s a tax on taxpayers and ratepayers in Virgina but if the Feds / Congress did it, it would not?

      😉

      If the Feds do this – taxpayers are protected? 😉

      Peter is right. BR has a good number of grumpy old men… who argue like…. well, grumpy old men all thewhile getting their health insurance from Uncle Sam. Geeze!

      • We don’t call them “grumpy old men”. That’s demeaning.

        Veranda Vikings is the best term. These are those who join country clubs, yacht clubs, HOAs, sit on the veranda and grumble about how their dues are wasted on maintaining the greens, docks, and the neighborhood pool and club house.

        Rugged individualism… hey wasn’t that one of the bullets to identify whiteness?

    • The French plan, no? They reversed flow to the unemployed and suddenly underemployed a sum to provide for rents, food and utilities.

      Floating the worker made more sense than floating businesses that are at risk even in the best of times.

      But either way, it required a government capable of a plan more than bluster. September 2008, Bush actually demonstrated leadership beyond his capabilities.

    • First, thank you for taking the time to parse this out of the budget language. I did not even try, knowing that I would not understand it but you would and hoping that you would enlighten us.

      Two, the shot by Larry about your wanting people to have their electricity cut off and put into the street was unfair.

      Third, these costs should not be foisted off on the ratepayers of any utility. Nor should there be moratoriums on cutoffs. Instead of using the COVID money for direct payments to the utility, the GA should use a bigger chunk of the COVID money to provide supplemental payments to unemployed persons to ensure that they are getting benefits equal to their income before being laid off due to the pandemic. That would encourage personal responsibility for one’s bills, without penalizing anyone for losing a job through no fault of her own. If the COVID money is not enough, then use the general fund, even the reserves and the rainy day fund, if necessary. In the end, those payments would help sustain the economy during the emergency.

      • So, how far back does this blog go? In 2008, how’d the TARP and bailout discussions go? Would I be wrong in assuming the same divisions as they are here? “Who needs GM, banks, etc. Let it fail.”

        • It’s an article of faith among those who dislike taxes and government spending… and I put myself with them on SOME issues like subsidized flood insurance and subsidized health insurance and bailouts gallore over the years.

          I just think we need to be honest about ALL the subsidies not just the ones some of us oppose. We present a picture that is missing the parts we don’t want to admit when it comes to taxes.

      • re: ” Two, the shot by Larry about your wanting people to have their electricity cut off and put into the street was unfair.”

        to be precise: ” Not sure where you got that! but my view is that this country, it’s society doesn’t like seeing moms with kids and the elderly living on the streets in cardboard boxes, etc and as long as that is true – we’ll tax each other to provide a safety net. It’s not unanimous by any stretch, there are those who would do so but ………..

        ….. — they won’t advocate actually putting them on the street, they argue instead that they shouldn’t have to pay for them – that’s it’s “wrong”.

        Steve (and others) have never advocating putting people on the streets and I have not said they did either because their argument is that they should not have to pay for those that cannot. They never deal with what happens if we do’t pay for them.

        Almost all of us, except for the truly wealthy, are “helped” by other taxpayers paying for us.

        Whether you have employer-provided or Medicare – that’s taxpayers helping you with their taxes.

        And that’s what I point out when people say they should not be “forced” to pay for others…

        yes….. it’s a “liberal” argument – but it’s also a real and factual one also that some prefer to ignore especially when they’re arguing that they should not have to pay for others…….

        • Living in the streets? Not a problem to the Right.

          It’s DYING in the streets. Bodies do start to stink.

        • But that help should be provided directly through taxes, rather than hiding it through hidden charges or accounting tricks. That is just lawmakers avoiding responsibility.

          • I agree with that – but that’s not a reason to not collect taxes to pay for it. Right?

            Are legislators sneaky about how they put costs on us?

            Do bears do it in the woods? Nothing new here…except for the daily grumpy old men rants!

            😉 and hey, I’m a grumpy old man also… 😉

  8. I thought the intent of this legislation was to set out provisions by which utilities could set up payment plans to allow the monies owed them to be collected from the customers who actually owe the money. However, knowing that virtually ALL of their losses will be covered no matter what, does anyone think Dominion is going to make any kind of honest effort to collect past due bills from those who actually owe the money?

    Also, late payment penalties/fees are just that – penalties for paying a bill late. They are set quite a bit higher than the actual cost of dealing with late payments so as to deter customers from being consistently late in paying their bills. Forgiving these fees does not cost the utility anywhere near the actual amount charged.

    In my opinion, neither Dominion, nor any other utility, should be allowed to collect the full amount of the late payment penalties they have charged during the declared emergency. They should be permitted to collect enough to cover the actual cost to the utility of dealing with late payments, but not the full amount.

    • Good point about the late fees. Utilities, especially Dominion, should not be allowed to collect them, much less have them rolled into the credits taken during the three-year review. Late fees are just gravy and Dominion is sopping up enough gravy as it is.

      • If there is a cost to processing customers not paying… like staff dealing with the paperwork, a separate part of the company with paid staff that deals with late fees – those costs – who pays them?

        • It should be paid by investors–that’s a cost of business that is borne by all businesses. And, before anyone says that cost is figured into the costs of goods and services provided by businesses, I want to remind them that those other businesses do not have a guaranteed profit level.

          • Why does it matter if DVP is guaranteed a set profit and all other costs end up on ratepayers anyhow?

            Most businesses do not have a guaranteed profit nor do the Electric cooperatives whose “members” ARE the investors?

            All costs to businesses are passed on to customers.

            Conservatives here made that point over and over about minimum wage and higher business taxes, BPOL, etc right?

            All I’m saying here is to acknowledge this issue on a more general basis – all costs are passed on to customers and investors expect a return or they’ll shop elsewher for investments.

            it’s the proverbial ” tax someone else” argument.

        • You know the answer.

  9. Admittedly off topic – Virginia may have bigger problems than our legislature, once again, using an opaque wealth transfer scheme. Last night’s debate was like watching a crackhead argue with my grandmother. 330M people and that’s the best we have?

  10. This is impermissible retroactive ratemaking as it takes an expense from a prior period and forces future ratepayers to reimburse it. At most, the VSCC can consider Dominion’s bad debt experience in setting an estimate for future debt. Did anyone in the GA or the VSCC go to law school?

  11. IF we back up to the premise of Virginia granting any utility a monopoly, we are essentially agreeing to forgo market competition to maintain cost-effectiveness, lower costs.

    When we grant the monopoly AND we guaranteed a specified profit – we are, in essence, guaranteeing the investors also a ROI AND we are agreeing to pick up costs.

    All the rest of this is about which box on a form to fill in with what number that either taxpayers or ratepayers will bear the cost of.

    It’s never going to come out of the hide of the investors. It’s preordained not to. It’s what we trade for adequate reliable power.

    Other states has done it different. California for example and we deride their approach that DVP reminds us – they pay way more for electricity than we do and it’s not near as reliable.

    Pick your poison.

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