Now, a Kind Word for Dominion

One of the better ideas in the Regulation Lite that Dominion proposes for electric utilities in Virginia is a provision that incentivizes power companies to generate cost-saving ideas. Under the old regulatory regime, power companies had little incentive to save. If they had devised an ingenious idea to cut costs, regulators would have passed on the savings to rate payers. By contrast, under the re-regulation bill now being debated, Dominion would pass on 60 percent of savings to rate payers but keep 40 percent as a reward.

One of the benefits of 10 years of partial deregulation at Dominion was the rise of a new corporate culture. Because the power company’s rates were capped, the only way it could improve earnings was to cut costs. David Shuford,vice president-state regulation, Shuford offers a couple of examples.

In the old days, Dominion maintained a team of meter readers who went door-to-door reading customers’ meters. Under deregulation, the company spent the money to install 2.2 million solid-state readers that could be read remotely. “Now you send a car down the street, and you can read them from the car,” Shuford says. “Now one person can read hundreds of meters in a day that would have taken a team to do.”

Another example: Soon after regulators imposed a fuel-price freeze on Dominion in 1994, energy prices shot higher — gas prices quadrupled, coal prices doubled, uranium prices doubled. With fuel prices threatening to pulverize the bottom line, Dominion created a team specializing in fuel procurement. Says Shuford: “They are scouring the market, negotiating deals, making hedges. We have a very sophisticated fuel-procurement process.” When re-regulation allows fuel costs to be passed along to the rate payer, that team will remain in place — benefiting rate payers as much as Dominion.

“There is a corporate culture now that didn’t exist 10 years ago,” says Shuford. “We don’t want to lapse back into the old habits.”

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8 responses to “Now, a Kind Word for Dominion”

  1. Larry Gross Avatar
    Larry Gross

    ” “Now you send a car down the street, and you can read them from the car,”

    JB .. the techology exists and is being used to “read” meters from a centralized computer so you don’t need people nor cars….

    Geeeeeze .. this sound like VDOT taking credit for the invention of the traffic signal while other DOTs are using computers to control them in network fashion.

    re: “fuel procurement”

    bogus… all of them including electricity itself are sold essentially by real-time auction…

    It’s called the commodity market.

    Geeze JB.. they’re claiming kudos for something that “normal” competitors do in the marketplace already….

    Is this the BEST that Dominion can claim?

  2. Ray Hyde Avatar

    Right, Larry. That was pretty much my thought too.

    The last time I saw the meter reader here, she drove up and used binoculars to read the meter without getting out of the truck, not car.

  3. Larry Gross Avatar
    Larry Gross

    internet over power lines…

    a way for Dominion to offer a service that could be tied to smart meters…

    a way for Dominion to help folks who can’t get cable.

    REC – Rappahannock Electric COOP is partnering with Broadband that is placed on THEIR towers…

    Dominion could actuall SELL the idea of being close to a tower – being close to broadband… as compensating benfit of the powerline.

    Face it folks… Dominion is a cash cow for it’s stockholders… and beyond that… they just want to be left alone at the trough…

    Electricity is their name and profit is their game…. 🙂

    I’ll bet that phrase sits on some Dominion Executives desk somewhere.

  4. Larry Gross Avatar
    Larry Gross

    Speaking of “good words”.. check out

    HB3115 – Eminent domain; compensation for damage to viewshed. Allows for just compensation to be provided for properties within 2,000 feet of the property to be taken or damaged in an eminent domain proceeding, if the viewshed of such other properties will be damaged by reason of such taking and use.

    Now.. let’s go ask the good guys at Dominion about how they feel about this bill to protect land owners from unfair “takings”.

    My understaning is that Dominion does not care for this bill… and may, in fact, be conducting a full court press….

    Dominion will tell you that this will make electricity more expensive for consumers….

    .. rather than it might hurt their bottom line for shareholders…

    .. this goes back to how important the “need” is for customers verses how important this “need” is for Dominion and it’s shareholders.

    Smart Meters could be part of a compromise solution.

    Install Smart Meters… but keep the power line on a schedule so that if the Smart Meters don’t produce the intended result… do the powerline deed – but fairly compensate landowners with Both Direct and Secondary impacts.

  5. Ray Hyde Avatar

    Compensation for viewshed damage is only one of the proposals that was put forth by a study commissin in 1999.

    Another was damages to be assessed by jury trials instead of a tribunal.

    Another was that legal expenses should be covered in case a plaintiff sued and won. Now it is capped at $2500, I beleive.

    Another was increased payment for moving costs when a business is relocated. The present cap is $20,000.

    Another was that damage to the entire property affeced should be considered, not just the land under the power lines.

    Typically the power company attempts to run the power line along boundary lines, to avoid cutting a property in half. But this means the neighboring property owner may be just as affected, although, at present, he gets nothing.

    And of course, the property owner gets paid once while the power company gets 12% return. But he only gets paid for the easement, he still owns the land and gets to pay tax on it.

    This whole thing is seriously broken. If it was fixed, it would go a long way to encouraging Dominion to consider other options.

  6. Ray Hyde Avatar

    Historically, more than 70% of land owners simply accept the power company offer.

    The power companies point to this as evidence that they are making fair offers, but critics say it is because the costs of litigation are high, and the probability of winning and the gains for the effort are small.

  7. Larry Gross Avatar
    Larry Gross

    You’re up against VDOT also. They’ll be opposed to any/all proposals that would make it harder for them to condemn property or acquire it for more.

  8. Ray Hyde Avatar

    Yes, but I think VDOT is different. I think condemning property for profit is different. Sure, VDOT took land from the farm,and paid a pittance. But let’s be fair here, I get to use the road, and I do, to support what remains of the farm. The VDOT deal wasn’t fair either, but, it makes my life better and easier. As you have often poointed out, it may make the land more valuable, if the county ever lets off the shackles.

    VDOT is not entirely a bad deal, because I get and may get something in return, even if I can’t quantify it. If the county “took” part of the land for seage treatment plant, I might even jump for joy.

    But what is Dominion offering? They are offering to charge me electric rates that guarantee them a 12% return on MY investment.

    No thank you.

    There is a difference between eminent domain for public use, and eminent domain for public benefit, no matter what the supreme court says.

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