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.