The Virginia Senate on Wednesday approved a bill over the objections of Dominion Energy that would restore state regulators’ oversight of how electric utilities can write off certain costs, the first time in recent memory the energy giant has lost a floor vote in the business-friendly upper chamber.
The surprise defeat for Dominion was only temporary, as the Senate quickly voted to reconsider and put off a final decision. But supporters said they are confident the measure will eventually pass with only minor changes, given the bipartisan vote of 27-13 in favor of the bill.
Dominion wields outsize influence in Virginia politics and has for years been able to largely dictate the state’s energy policy. But a new Democratic majority, which includes several lawmakers who are skeptical of the company, has tested its political prowess.
“It’s a brand new day,” said Democratic Sen. Jennifer McClellan.
The company did not immediately respond to a request for comment.
Dominion is still set to score major victories that will boost its bottom line this legislative session, which is set to end Saturday. A sprawling energy bill called the Clean Economy Act lays out a plan to get Virginia to 100% renewable generation and mandates that Dominion expand its offshore wind generation, solar or onshore wind generation and use of battery storage technology.
The State Corporation Commission has estimated Dominion would collect approximately $50.8 billion from Virginia customers due to those provisions and would earn about $12.5 billion in profit over the life of the facilities after taxes, spokesman Ken Schrad told The Associated Press.
Schrad said SCC staff made those calculations based on Dominion’s own preliminary estimates of capital investment, operations, maintenance, decommissioning and financing costs.
The SCC has estimated that implementing the bill would result in an annual minimum increase for the typical residential customer’s bill of $333.60 a year for the years 2027-2030, a figure that the legislation’s backers have disputed.
“The ratepayer’s gonna suffer this year,” said Republican Sen. Richard Stuart said after Wednesday’s vote. “This lessens the blow.”
The legislation that was voted on Wednesday, sponsored by freshman Democratic Del. Suhas Subramanyam, requires the SCC to determine the amortization period for recovery of any appropriate costs due to an early power plant retirement. The measure says the commission must “establish a recovery period that best serves ratepayers.”
The bill, which has been backed by environmental groups and the attorney general’s office, passed the House in February.
The measure undoes a provision of a 2018 law that gave Dominion broad accounting flexibility that lets the company avoid having to pay refunds or lower its rates.
The SCC said Dominion earned $277 million in excessive profits in 2018 and $300 million the year before. If passed, this year’s bill wouldn’t necessarily mean customers would get rebates because the 2018 law gives Dominion other avenues to avoid having to lower rates.
Dominion lobbyists spoke against the bill in committee hearings, noting a potential conflict with Democrats’ clean energy goals.
“You may wish to consider how this affects broader policy that you’re embracing, and it would seem somewhat contrary policy to, on the one hand, want to decarbonize and, on the other hand, complicate the retirement of fossil fuel generation stations,” lobbyist Bill Murray said.
Five Dominion lobbyists quickly assembled outside the Senate chamber after the bill passed to press lawmakers to reconsider.
Democratic Sen. Louise Lucas moved for the legislation to be pulled back and considered at a later date, expressing concerns about what impact the legislation would have on Dominion’s plans for offshore wind. Officials from Hampton Roads, including Lucas, hope the offshore wind project will be a huge boost for the region’s economy.
“I’m not about to let anybody’s bill screw that up,” she said.
Despite supporters’ confidence in the bill’s eventual passage, its fate is still uncertain. Negotiations on energy bills are set to be one of the most contentious topics between the Senate and the House as this year’s legislative comes to a close.
After she delayed passage of the vote, Lucas got into a heated argument about energy policy in a Capitol hallway with Del. Jay Jones — who has been outspoken in trying to strengthen regulatory oversight of Dominion. At one point, Lucas threatened to “break his (expletive) arm.” The two later patched things up, Lucas said.