Dominion Energy-funded legislators are attempting to pass a bill in the Virginia General Assembly that would increase Dominion’s profits by $4 billion, according to the Virginia State Corporation Commission (SCC).
The legislative effort comes as Virginians are struggling to keep up with soaring utility bills, with Dominion recently revealing plans to charge customers $2.5 billion for additional fuel costs from soaring methane gas prices.
Senate Bill 1265 was introduced by Senate Majority Leader Dick Saslaw (D), who has received at least $660,508 in donations from Dominion since he was first elected to the Senate in 1980, according to the Virginia Public Access Project.
Saslaw’s bill proposed a fundamental change to how Dominion’s return on equity – a measure of how much profit a utility is allowed to earn – is calculated. Under the text of Saslaw’s bill, Dominion’s 2021 return on equity would have jumped up from 9.35% to 10.77%, costing customers an extra $4 billion, the SCC reported.
Dominion’s performance under fire with investors
Dominion’s push to increase its return on equity comes as the utility faces serious pressure on Wall Street. In November, Dominion’s stock was downgraded to “neutral” by Credit Suisse and “underperform” by Bank of America. The utility subsequently announced a “strategic review” of its business.
Steve Ridge, Dominion’s Senior Vice President and CFO, said the company was consistently living below its downgrade threshold and it’s not “a place [they] want to be.”
The increased profit margins from Senate Bill 1265, if it passes, would likely appease the nervous investors.
On Feb. 7th, Senate Bill 1265 passed the Senate and crossed over to the House after the third hearing of the bill. Twenty-seven senators voted in favor of passing the bill, and all of them have accepted a campaign contribution from Dominion Energy, totaling nearly $3.8 million, during their political tenure.
All but two Republican senators voted for the bill.
The House version of the bill, HB 1770, crossed over on Feb. 7th as well, but not without major revisions. The House bill is being carried by House Majority Leader Terry Kilgore (R), who has received at least $435,891 in donations from Dominion since he was first elected to the House in 1994, according to the Virginia Public Access Project.
The House bill excludes the profit increase, an amendment lobbied for by the Youngkin Administration. Youngkin was the target of $200,000 of Dominion Energy’s dark money spending in a failed attempt to defeat his gubernatorial candidacy.
House Bill 1770 narrowly passed the House and crossed over to the Senate after the third hearing of the bill. Fifty-two delegates voted in favor of passing the bill, and all but three of them have accepted a campaign contribution from Dominion, totaling nearly $2.4 million, during their political tenure.
All Democratic delegates voted against the bill.
A boost to Dominion’s profit is not the only bill hike customers are expected to absorb on the horizon. In a call with investors, Dominion also reported the company has an under-collected balance of approximately $2.5 billion in fuel costs. The company will likely file requests with the SCC to recover the uncollected fuel costs from customers in the near future, adding to bill pressure for Dominion’s customers. A Census Bureau survey earlier this year found that 16% of Virginians were unable to pay their utility bill.
On Feb. 16, SB 1265 passed the House Committee on Commerce and Energy, where Kilgore serves as the Vice-Chair. HB 1770 is currently sitting in the Senate Committee on Commerce and Labor, waiting to be heard, where Saslaw serves as the Chair.
Header Image from Virginia.gov
NOTE: This article was updated after publication to reflect a new analysis from state regulators showing an impact of $4 billion to customers. The original article stated $2 billion.