The Bill Promising “Lower Power Bills” Got Changed on Final Day
by Steve Haner
Remember the highly hyped bill at the General Assembly that was going to lower most electric bills by shafting Virginia’s data center industry? It underwent a late transformation, and the promise of big financial relief is fading. It was always unrealistic.
Under a rewritten version of Senate Bill 253, approved as a conference report just before the Assembly adjourned Saturday, Dominion Energy Virginia is still called upon to ask the State Corporation Commission to shift major costs to the largest users. The data centers would be asked to pay 100 percent of the utility’s purchased capacity costs on the theory they are fully responsible for the utility’s energy generation shortfalls (which is absurd).
But as the bill passed the Senate weeks ago, that petition was to be filed by July of this year. Now the proposal will become part of the company’s next general rate review, no earlier than 2027. And the conference version adds a declaration that the Commission “may, in its discretion, approve or deny the Phase II Utility’s proposal in whole or in part.”
There have been so many examples in recent years of the Assembly restricting the SCC’s authority that the inclusion of that clear “be our guests and say no to this” is noteworthy.
By delaying the issue until the end of the next Dominion rate case, what will have happened before this is decided? The 2027 elections for the House of Delegates and State Senate will be over, with Democrats campaigning on the claim that this toothless bill was a great consumer victory. They got the newspaper headlines and X messages they needed from it.
The SCC will probably also have finished a review it has already ordered of the cost allocations between various classes of electricity customers, something that very well could result in higher costs for those big customers to the benefit of other classes. This is hardly the only 2026 bill where the Assembly was pretending to be proactive by instructing the SCC to do what it was already doing.
The major transformation of such bills through a last-minute, unexamined rewrite has become standard operating procedure for our General Assembly. The patron, Senator Louise Lucas, D-Portsmouth, spent all of 60 seconds discussing the changes on the Assembly’s last day. No questions were asked before the 21-18 party line vote. (It was more bipartisan in the House, 73-23).
Then a real surprise: an entirely new issue was introduced in the obtuse, dense text of the enactment clauses, causing Lucas to stumble over the word “securitization” in the text she’d been handed and tell the senators the bill now included “scrutinization” of fuel costs.
With the high energy usage during last summer and this past cold winter, and because of the energy price spikes since the United States and Israel attacked Iran, Dominion is expecting a major jump in the fuel factor it adds onto bills later this year. A petition to adjust that is due in a few weeks.
So once again, as it did with the fuel cost spike due to the Russian attack on Ukraine, it will want to “securitize” those costs with a bond, spread the cost out over several years, and layer on years of interest charges. But the short-term effect is a major sudden jump in price is avoided, something that will also be popular with politicians before that 2027 election.
That move will be touted as “bill relief,” just as it was three years ago. It is not bill relief. In the long run, due to the interest, it costs ratepayers extra.
The final version of the bill still includes permission for Dominion to spend five more years placing existing residential tap lines underground, adding billions of dollars onto all its customer bills to cover construction, utility profits and interest payments. Unlike with the cost allocation idea in the other part of the bill, in this case the SCC is still ordered to approve these projects without considering if they are reasonable and prudent.
But the last line of the text of the final version still calls this polyglot concoction “the Fair and Affordable Electric Rates and Reliability Act.” Those who voted aye will be sticking with that name. It will look great in election brochures.
They assume – correctly – that consumers will never know what hit them and the news media won’t understand it either.
