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Dominion Virginia’s Industrial Customers Mount Rate-Related Legal Appeal

January 14, 2016 By Cheryl Kaften

The Virginia Committee for Fair Utility Rates – an advocacy group representing major industrial customers of Dominion Virginia Power – said in filings (Case No. PUE-2015-00058) with the State Corporation Commission (SCC) on January 6 that it will appeal to the Virginia Supreme Court a new law that prohibits the SCC from reviewing rates or mandating refunds through 2022.

 The announcement follows what could be the commission’s final rate review of the decade. In a November 23 order – stemming from a regular, 2015 biennial review of Dominion Virginia’s the rates, terms, and conditions for the provision of generation, distribution, and transmission services – the SCC directed the utility to refund $19.7 million to customers, reflecting excess earnings during 2013 and 2014.

Going forward, new legislation passed by the Virginia General Assembly last winter, SB 1349, effectively bars the SCC from conducting a biennial review of the rates, terms, and conditions for any service of Dominion Virginia Power for the five test periods beginning January 1, 2015, and ending December 31, 2019.

And that’s where the Supreme Court challenge comes in. According to Ivy Main, author of the Virginia Committee for Fair Utility Rates blog, the new measure “was widely criticized … as a handout to Dominion.”

She noted, “How big a handout is not clear, [but it will be] ‘over a billion dollars,’ according to the calculation of Judge James Dimitri, one of the three SCC commissioners.”

Writing in a partial dissent, Judge Dimitri characterized the new law as “unconstitutional,” noting that Article IX, Section 2 of Virginia’s Constitution explicitly assigns rate-setting to the commission – mandating that “the commission shall have the power and be charged with the duty of regulating the rates, charges, and services and, except as may be otherwise authorized by this Constitution or by general law, the facilities of railroad, telephone, gas, and electric companies.”

Therefore, Judge Dimitri opined, the SCC should:

  • Give no authority to SB 1349,
  • Demand a refund covering 2013 and 2014, and
  • Continue to follow normal rate procedures going forward.

“The record in this case,” he said, as well as in other biennial review proceedings, demonstrates that, “when conventional rate standards are applied, there have been, and are projected to continue to be, excessive base rates that are being paid by Dominion customers.”

The two other judges, Mark Christie and Judith Jagdmann, did not address the constitutionality issue in their opinion for the majority. Indeed, it was not tackled at all during the rate review.

Ordinarily, Main said, any decision issued by the SCC can be appealed to the Virginia Supreme Court. But then,” she noted, “ordinarily you have to raise an issue during a proceeding before you can appeal it. It’s not clear whether the court will agree to hear an appeal … if the Virginia Committee for Fair Utility Rates decides to pursue it.”

However, all is not lost, Main said. “Legal experts tell me that the Virginia Committee for Fair Utility Rates—or anyone else for that matter—can still challenge the constitutionality of SB 1349 by filing a new and separate case seeking a declaratory judgment from the SCC. A new case, with new arguments, yielding a decision on the merits, would most certainly be appealable to the Court.”

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