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.  

It reflects slightly lower costs in one rider, Rider R for the Bear Garden power plant, and an estimated $1.06 reduction due to the recent federal income tax rate cut, which is still being litigated.  It projects a possible bill of $120.71 by November 1.

June SCC estimate of rate impact of various rider changes pending. Click for larger view.

Going back to a June 2018 post, when we last explored this table the bill was projected to be above $120  by now, not $117.64.  The June version started with a base bill of $114.20, which has grown but not as high as it might have.  That $2.54 difference between the projected and actual February amounts probably reflects several adjustments, including at least some SCC decisions that went against the utility and in favor of consumers.

Several lines on the table are unchanged from the older version.

Don’t relax.  There are many major costs coming toward consumers which are not part of any pending cases, and thus not yet reflected in the chart.  Every one of them results from political decisions by Virginia’s legislators or Governor.

Coal Ash Costs:  The table does include a proposed amount for the new Rider E for recovery of current environmental compliance costs, but billions of dollars of additional coal ash remediation costs will start to to accrue this summer and will appear in that Rider E starting in 2021.  A previous promise to hold the cost to $5 per month for that typical residential customer has quietly disappeared from the bill.

Regional Greenhouse Gas Initiative:  Virginia will enter the RGGI carbon trading exchange with other Northeastern states in 2020, and just how those dollars will be accounted for remains to be determined.  It may flow through the fuel factor and the bill impact might not be too large.  If captured by the state treasury and used for state spending programs – as many hope – that will produce a substantial increase in that fuel factor.

Grid Transformation:  The SCC rejected much of the proposed $1.5 billion first phase of the utility’s proposed upgrades, but the General Assembly created major incentives in the Ratepayer Bill Transformation Act for the utility to back up and try again with revised proposals.

Done right, many of the grid improvements should be advantageous to customers.  But they will not be free, and the utility still has the option to recoup them through yet another rate adjustment clause.  If not done that way, it will spend excess profit dollars that otherwise might have been returned to ratepayers in the future.

New 2019 Riders:   As previously reported, House Bill 2691 allows the utilities to create RACs to harvest ratepayer dollars used to expand into the rural broadband business, and House Bill 1840 will set up a rate adjustment clause to extend speculative transmission lines to empty business parks and industrial sites.   Neither has passed yet but they are advancing.

This is a useful scorecard and I hope the SCC will continue to update and release it from time to time.

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15 responses to “Fresh RAC Tracker Doesn’t Reflect What’s Coming”

  1. A 6.7% increase seems pretty significant. And, as you say, the scary part is what the estimate does not include.

    Does the SCC update this scorecard on an ongoing basis? If so, I hope you’ll periodically publish updates on the blog — once a year at least.

    1. Steve Haner Avatar
      Steve Haner

      I see it buried in staff comments on cases from time to time. I don’t read them all and may miss it sometimes. Once a year in the fall the SCC publishes a report that sums up the previous year, providing various bill illustrations.

      What I judge significant is what I see coming like a freight train -RGGI, the grid investments, coal ash, and the major renewable generation projects not yet fully formed.

  2. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    The big story here is how much of these grossly rising costs right now, and far into the future, are being driven by the environmental ideologues, and their fat crony capitalist allies, and Virginia’s craven Democratic regime, all of these special interests madly trying to hop aboard a corrupt gravy train. But now too the locals are beginning to revolt against the abusive use of Virginia lands for these renewable projects that soon will grow out of control like the wild west, Virginia style. See what is happening in Spotsylvania County right now, and that is only the start of the coming revolt against this growing plague.

    Meanwhile, the experts on the payroll of this movement tell us all the renewables are cheap

    1. Steve Haner Avatar
      Steve Haner

      A lovely narrative, Reed, but plenty of Republican legislators are going along with it, too. Too many.

      1. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        That saddens but does not surprise me, Steve, the whole state is open of sale 24/7. Recall the “Speaker’s Fund” fat and chock full with ill gotten gambling casino money who’s projects soon may well spill out across the Virginia landscape amid the new wind towers, and thousands upon thousands of solar panels.

      2. Dick Hall-Sizemore Avatar
        Dick Hall-Sizemore

        Steve is correct. Look at the votes on the two 2019 Rider bills: HB 2691 (rural broadband) passed the House, 96-2, and was reported out of Senate Commerce and Labor, 13-1; HB 1840 (business parks) passed the House, 72-23 and, of those voting against it, all but 2 were Democrats, and it was reported out of Senate Commerce and Labor with no opposition. So, you can’t hang this just on Democrats. In fact, what opposition to Dominion that exists is coming from Democrats.

    2. Dick Hall-Sizemore Avatar
      Dick Hall-Sizemore

      What is going on in Spotsylvania? I imagine Larry will let us know!

  3. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    Every member of the General Assembly should be sent this scorecard and the estimates of the upcoming issues. Obviously, the GA approved of most of these initiatives, but the members should be aware of the cost. They may think the initiatives are worth the cost, and that’s OK. At least, they will be better informed.

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Right Steve. And this is just the start of very big and ugly battle. These renewable power projects are grossly inefficient land and production wise. They are going nowhere fast when people begin to learn the truth that everyone is hiding now. The idea of 100% power or anything remotely close soon is a fantasy and nightmare.

  4. LarrytheG Avatar

    Much of Spotsylvania gets it’s power from Rappahannock Electric co-operative and so I’m not clear on how these RACs affect them and me.

    Yes.. we have a large solar proposal and it has significant opposition especially from a high-dollar gated community that basically abuts it and it’s likely going to get voted down – we’ll see.

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Oh, its those evil rich white folks again. Blacks love wind towers and solar panels humming in their ears and despoiling their land and views all day long if the sun shines and/or the wind blows.

  5. LarrytheG Avatar

    What strikes me about the RACs is that no matter what they are for – even for demand-side conservation that would, in theory, reduce consumption – every single one of them is configured to deliver a profit to Dominion – even if it saves money!

    They will get their pound of flesh no matter conservation or renewables or coal ash – etc… every item entitled them to charge enough for them to get their profit!

    The irony is that while a few years back – people were essentially at the mercy of whatever electricity cost – the options for technology for cutting back were more limited than now.

    Now… we have LEDs, on-demand water heaters, Smart Thermostats, high SEER heat pumps, etc and many folks are buying them – just as many folks look at the EPA mileage ratings on the cars they buy these days – to the point where the State is starving for transportation dollars!

    So how is it that VDOT is hard up because of more efficient vehicles while DOminion gets fatter and fatter the more conservation that people use?


    and let me leave you with this chart to nibble on:

  6. What strikes me about the RACs is that — they are RACs. They adjust rates automatically for changes in a certain category of costs. And it can be very difficult to go back and see what the baseline for those automatic adjustments is. A quick example: you have an RAC covering a new generating plant — but wait, you’ve still including cost recovery for the old generating plant that was retired when you built the new one? Yes, the costs of that retired plant are still in the base rates, until the base rate is re-set based on a newer, more recent test period — a rate reset that the GA has forbidden the SCC to do, except in limited circumstances.

    LarryG, you ask how these RAC costs affect you, a co-op customer. They don’t; these RACs are elements of Dominion’s retail rates filed with the SCC. But there is another RAC that affects you; it is part of Dominion’s wholesale rates filed with the FERC. I can’t remember right now whether RE Co-op pays ODEC which pays Dominion, or whether RE C. buys some power directly from Dominion, but either way, that wholesale rate has a purchased power adjustment clause in there that fluctuates to reflect the cost of Dominion or ODEC wholesale market (PJM) purchases less sales, and there may be other automatic adjustment provisions in there.

  7. LarrytheG Avatar

    Thanks Acbar! But all these other RACs for Grid Transformation, solar, etc? Are they Dominion Only?

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