No, RTD, That Bill Does Not Cut Future Electric Rates
by Steve Haner
The nonsense that the General Assembly is passing a bill to shift huge energy costs onto data centers and off all the other utility customers is going to be a bipartisan meme. A bill that merely punts that issue to the regulatory State Corporation Commission passed on a unanimous State Senate vote.
Senate Bill 253, which first appeared last week as a last-minute substitute to an unrelated bill, was touted as “Legislation to Cut Electric Rates…” in a Richmond Times-Dispatch headline. The paper went on to describe the bill as “promising” a three percent rate reduction for residential customers. Did either reporter listed in the by-line read the language in question?
The House companion bill, House Bill 1393, was not approved unanimously. It received nay votes from most House Republicans. These bills will be the political fig leaf some legislators will try to hide behind as all the other energy bills they have passed will be raising costs in coming years.
All the relevant enactment clause in the bills does is direct Dominion Energy Virginia, and only Dominion, to “propose to the State Corporation Commission in a petition” (emphasis added) a series of changes in how various major capital costs are allocated by customer class, imposing them in full on the large mega users. The SCC, which had already stated it was going to examine those same allocation issues, has full discretion to say no. Look again at the language:
“In evaluating proposals by the Phase II Utility pursuant to this enactment, as well as other customer class cost allocation issues and methodologies in future biennial review proceedings, the Commission shall consider the goal of mitigating any rate increases to the broad customer base of the Phase II Utility that are associated with connecting and serving high-load, high load factor customers, in addition to any other factors the Commission determines to be in the public interest.” (Emphasis added again.)
The bill gives the SCC another case to consider this year, with a short fuse timeline for a decision. But none of the legislative language available to the General Assembly to dictate an SCC outcome or narrow the scope of its examination shows up. In the Dominion rate case decided late last year, the largest users came out already facing higher future costs through fixed base charges for generation and distribution.
Are data centers responsible for the surge in demand which is driving the need for more generation and transmission? They play a major role, but to claim they are solely responsible and should pay 100 percent of the marginal costs will be a hard lift. And waving a red flag on the issue of fairness, the enactment clause seeks to exempt other large industries – such as my former employer the shipyard in Newport News – from bearing a larger burden. Why should the shipyard’s electrons cost less than Google’s?
This is the same bill that also reauthorized another ten years of the Dominion program to extract money from all its ratepayers to provide underground residential tap lines to a few of its ratepayers, so now all the members of the Senate own that, too. That was dismissed as only costing those ratepayers about $5 per month, while the effort to stick to the data centers was claimed to save them the same $5. (A wash is a win? Really?)
The continuing cost of the undergrounding program is a lead pipe cinch, reinforced by language in the Code of Virginia dictating the outcome of that case at the SCC (“shall be deemed reasonable”). The “promise” of a rate cut by forcing full costs of future capacity purchases and transmission lines onto data centers is smoke and mirrors at this point.
Republished with permission from Bacon’s Rebellion.
