Virginia’s largest electric utility is facing widespread opposition to its $870 million energy efficiency spending plan, which is supposed to help the poor and reduce the need to build new power plants.
Dominion Energy says the cost of spending that $870 million should include any lost revenue it would incur because of decreased electric usage. If approved by regulators, that could mean about a 40 percent, or $350 million, cut in actual spending on energy efficiency programs.
That position has put Virginia’s most politically powerful company directly at odds with Gov. Ralph Northam, lawmakers and others who say the company is not living up to a deal it struck last year.
“Dominion is saying they’ll give you three scoops of ice cream and then forgetting to mention they’re using a teaspoon for their scooper,” said Albert Pollard, a former Democratic lawmaker who is a consultant on energy issues.
Dominion pushed through a major overhaul of electric utilities in 2018 that could lead to substantial increases in customers’ bills. Those changes also gave the company new flexibility in accounting for costs that virtually guarantee its rates can’t go down.
To get some skeptical groups and lawmakers to support or at least drop opposition to the legislation, Dominion also committed to submitting $870 million in proposed energy efficiency programs to state regulators over the next decade.
Advocates of increased energy efficiency spending, which can include swapping out old incandescent lightbulbs for LEDs, said it helps both ratepayers and the environment by reducing the need to produce and transport electricity.
Dominion often touted the $870 million figure in public statements when promoting the law without indicating that actual spending on energy efficiency programs could be significantly lower.
Secretary of Natural Resources Matthew Strickler, who was Northam’s point person in negotiations with Dominion over the 2018 law, said it was “absolutely” clear to him that the energy efficiency total was not to include lost revenue.
“Our discussions always centered around ($870 million) being the number Dominion would file,” Strickler said.
Democratic Sen. Dick Saslaw, a key sponsor of the legislation and one of Dominion’s most outspoken supporters, said lawmakers expect to see the full $870 million spent and did not approve including lost revenue in those costs.
“That certainly wasn’t the intent of the bill,” said Saslaw, who added that he’s prepared to file new legislation next year making it “abundantly clear” that lost revenue not be included.
Virginia Poverty Law Center Director of Outreach and Consumer Advocacy Dana Wiggins was part of a small group that hammered out the final version of the bill with Dominion. She said the VPLC would not have dropped its objections to the legislation if Dominion had indicated it planned to include lost revenue in its energy efficiency programs’ costs.
“There’s disappointment from many of us,” she said.
She added that lower-income Virginians are more likely than others to live in houses or apartments that would benefit from improved insulation, HVAC upgrades, or other energy efficiency spending.
Others opposing Dominion’s lost revenue plan include Walmart, the Sierra Club, and the advocacy group Conservatives for Clean Energy.
At a hearing Wednesday before the State Corporation Commission, Dominion said it is trying to follow the law as written and seeking “clarity” from regulators about energy efficiency costs.
Dominion spokesman Rayhan Daudani did not address complaints that the company wasn’t keeping its word from last year’s deal. But he said the company does have a long-term commitment to energy efficiency programs.
“We are focused on gathering stakeholder input to inform an annual offering of energy efficiency programs and help Virginia customers reduce energy usage,” he said in a statement. “That activity doesn’t stop when we reach the $870 million target.