Sierra Club: Senate Of Virginia Allows Dominion To Regulate Itself While Ratepayers Foot The Bill

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Sierra Club: Senate Of Virginia Allows Dominion To Regulate Itself While Ratepayers Foot The Bill

RICHMOND, Virginia - Today, the Senate of Virginia passed Senate Bill 966 in a vote of 26-13. SB966, introduced by Sen. Frank Wagner (R-Virginia Beach) is a radical restructuring of how monopoly utilities like Dominion Energy Virginia are regulated in Virginia.

The legislation would allow monopoly utilities to use excess earnings from over-charges paid by customers to build new electric infrastructure. The utilities could then “double dip” by billing customers twice for these capital projects by incorporating them into the company's rate base for which customers are charged annually. For every dollar invested in the rate base, the company receives a guaranteed Return on Equity of 10 percent. This allows Dominion to charge ratepayers double for the same project, plus an additional 10 percent.

The legislation also fails to fully refund Dominion’s overcharges from 2015-2016. Currently, the legislation proposes Dominion refunds just $200 million of what the SCC estimates to total between $327.8 million and $705.2 million in overcharges from 2015-2016.

Notably, several members of the Governor’s working group including the Virginia Poverty Law Center, the Attorney General’s office and the Southern Environmental Law Center do not support this bill. In addition, the SCC has released analysis showing negative impacts on ratepayers.

In response, Kate Addleson, Director of the Sierra Club Virginia Chapter, released the following statement:

This bill would further erode the SCC’s authority to regulate monopoly utilities including Dominion Energy Virginia, and effectively allow Dominion to use their outsized influence in the General Assembly to regulate themselves. Giving Dominion the power to charge customers twice, or “double dip” on infrastructure projects effectively steals from Virginians, and hits low-income families the hardest.

Dominion is proposing to refund an arbitrary amount representing just pennies on the dollar of SCC estimates of overcharges from the years the refund freeze was in effect. The amount to be refunded should be determined by an SCC audit in a rate case, not by Dominion in the legislation they wrote.

While progress towards stricter energy efficiency standards and more clean energy is commendable, it should not come at the expense of ratepayers’ rights and sensible supervision.

Under this new scheme, refunds for Dominion’s overcharges over the first four-year period, no matter how high, are capped at a meager $50 million dollars. This is unacceptable: every dollar overcharged by Dominion should be returned.

The Senate’s vote today allows Dominion to profit from projects that Virginians will pay for twice, and leaves us footing the bill. If the goal is to end the “rate freeze,” then the General Assembly should simply restore government watchdog authority so they can force Dominion to treat customers fairly.



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The Sierra Club is the oldest and largest grassroots environmental organization in the United States. It was founded on May 28, 1892 in San Francisco, California by the well-known conservationist and preservationist John Muir, who became its first president. The Sierra Club has hundreds of thousands of members in chapters located throughout the US, and is affiliated with Sierra Club Canada.

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