- Associated Press - Friday, February 6, 2015

RICHMOND, Va. (AP) - Virginia would weaken oversight of its two largest electric utilities’ rates, under legislation approved Friday in the state Senate.

The bill would exempt Dominion Virginia Power and Appalachian Power from comprehensive rate reviews by the State Corporation Commission for several years. It was sponsored by Virginia Beach Republican Sen. Frank Wagner and approved by a 32-6 vote.

If the bill becomes law, it could mean that Appalachian Power’s customers don’t get a refund the company’s president is currently projecting.

Proponents of the measure said exempting the utilities from biennial rate reviews would freeze rates in place and prevent potential large increases. Several lawmakers said bill is needed because of the uncertainty surrounding proposed federal carbon emission rules and how they might unfairly affect Virginia.

“I think this is a pretty good bill for the consumer quite frankly,” said Democratic Senate Minority Leader Sen. Richard L. Saslaw.

But opponents said hurts it customers by allowing utilities to reap excessive profits.

Fairfax Democrat Sen. Chap Petersen argued that the General Assembly shouldn’t try and trump the SCC on ratemaking decisions. He said the SCC is much better suited to handle complex issues.

“I’m gonna shock some people when I say this, but not everybody trusts us on these kind of issues to get the right answer,” Petersen said.

Dominion, which helped craft and shape Wagner’s legislation, is the single biggest corporate donor to Virginia political campaigns and wields unrivaled power at the General Assembly.

During normal biennial rate reviews, the SCC can order partial refunds to its customers if it finds the utilities have been earning excessive profits. If a utility is found to have too much profit during two consecutive reviews, the SCC can lower the utility’s rates.

Last month Appalachian Power President Charles Patton said at a hearing in West Virginia that the company’s Virginia customers had recently received a refund after the 2014 review and would likely be entitled to a partial refund after a 2016 rate review.

“I think that when we get to the next biennial in Virginia, there’s going to be another refund to customers” Patton said, according to a transcript.

Appalachian Power spokesman John Shepelwich said Wagner’s bill would allow the company to “use those possibly available funds for investment in things that will benefit our customers even more.”

“So the bottom line for the customer during a base rate freeze will be rate stability,” Shepelwich said.

Dominion has said it does not expect a 2015 biennial review would lead to any customer refunds. The company’s chances of having to pay refunds was diminished after the General Assembly passed legislation last year that allows the company to write off about $400 million in costs associated with a nuclear plant it may or may not build.

To help win support of some Democrats, the bill was amended Friday with provisions aimed at increasing utilities’ use of solar power and creating energy assistance programs for the elderly and poor. Discussions about the amendments were largely done in private conservations out in Capitol hallways involving several Dominion lobbyists, lawmakers and other stakeholders.

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