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Eagle-eyed Dominion Energy customers might notice something unusual about their power bills.
They include a breakout section on what the company calls “non-bypassable charges.” A slew of fees, for everything from clean energy projects to offshore wind and power purchase agreements, are listed.
The fees, called riders or rate adjustment clauses, are approved each year by the Virginia State Corporation Commission, the regulatory body governing utilities, railroads, certain financial institutions and other industries.
The riders are part of a push and pull between the electric monopoly, which says its promotes transparency, and consumer advocates, who say the riders make bills more expensive and mislead consumers.
“Riders have been one of the primary ways in which Dominion has been able to game the system,” said Will Cleveland, a lawyer and lobbyist with the Southern Environmental Law Center who has been litigating Dominion Energy cases with the State Corporation Commission for years.
Here’s what Dominion says some of the newest riders for residential power bills mean:
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- Rider CE Clean Energy Projects: This fee helps fund Dominion’s clean energy projects in Virginia, such as solar farms, spokesperson Cherise Newsome said. More than 30 completed and under construction solar farm projects are listed on the company’s website.
- Rider RPS Renewable Energy Pgm: The rider supports Dominion’s renewable energy program, Newsome said.
- Rider CCR Coal Ash Closure: Newsome said this rider pays for coal ash cleanup operations at various decommissioned Dominion power plants.
- Rider OSW Off-shore Wind: This rider helps pay for the 176-turbine offshore wind farm Dominion plans to operate 27 miles off the coast of Virginia Beach, Newsome said. The installation, called the Coastal Virginia Offshore Wind project, is expected to have capital costs of almost $10 billion and a total project cost of about $21.5 billion, according to Associated Press reporting.
- Rider PPA Power Purchase Agreement: This rider involves power purchase agreements where Dominion buys power generation from third parties to make sure the electrical grid is stable, Newsome said.
- Rider PIPP Universal Service Fee: This Percentage of Income Payment Program rider helps pay for Dominion’s programs that helps customers with limited income or monetary emergencies be able to afford their electric bills, Newsome said.
Consumer advocates say bill payers lose out
Power bills display only the riders that have most recently been approved by the State Corporation Commission, Dominion spokesperson Bonita Billingsley Harris said.
The way riders are displayed on bills is misleading, Cleveland said. In this year’s bills, most of those riders are for renewable energy projects or decarbonization efforts. That information could mislead a customer into believing they were only paying riders for environmentally friendly projects, Cleveland said.
“They are not being fully transparent,” Cleveland said, about riders related to coal power plants or nuclear energy, for example, which are not displayed.
The rider system in its modern form was developed in 2007 when Dominion restructured its regulatory rules, Carmen Bingham, affordable energy project coordinator at the Virginia Poverty Law Center, said in an email. Bingham, who also lobbies for consumers in Dominion Energy issues, said riders were originally devised as a way for Dominion and other utilities to solicit investors for capital projects in a way that would be cost-effective for customers.
But critics say Dominion has taken advantage of this system because riders can be added yearly while base rates — the charge for operating existing power stations and transmission wires — have until 2023 only been reviewed every three years. Because Dominion can add riders without being required to level-set its rate base, the company can earn profits on projects long since paid for by customers, Bingham said.
Cleveland and Bingham referenced Dominion earning excess profit. Over a four-year period, Dominion Energy earned more than $1.1 billion above a fair profit from Virginia customers, according to State Corporation Commission testimony in 2021.
When Dominion earns excess profit, the commission has the authority to return those rates to customers, Harris said in an emailed statement. In the past, she said the commission has refunded those earnings to customers and allowed Dominion to use them for power grid investments. For example, Dominion was able to use about $309 million of that $1.1 billion in excess profit for clean energy projects because of a favorable 2018 state law, according to the Richmond Times-Dispatch.
New law gives commission more oversight power
A newly exacted state law gives the State Corporation Commission more regulatory power over Dominion, ultimately leading to lower bills for customers.
The law gives the body more power by allowing it to review base rates every two years instead of three. It also rolls $350 million in riders into base rates, lowering monthly bills by an average of $6 to $7, according to Dominion.
Victoria LaCivita, spokesperson for Virginia Attorney General Jason Miyares, hailed the bill as a victory for consumers, whose complaints his office partly oversees.
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“Attorney General Miyares is a fierce advocate for rate payers through his role as consumer counsel, and he is pleased that the new legislation signed by Governor Youngkin will result in the elimination of $350 million worth of riders without increasing base rates,” LaCivita said.
But consumer advocates say the law isn’t perfect. Bingham praised the law’s actions, but noted it would not take away the excess profits Dominions previously made from past power bills.
The law also won’t prevent Dominion from adding new riders in the future, Cleveland said. And those riders can increase customers’ bills, Bingham said.
Dominion continues to have powerful allies in the Virginia legislature, the pair noted. The power company has donated more than $2.5 million to candidates or campaigns on both sides of the aisle in 2023cq so far, according to the Virginia Public Access Project. That includes funds to local candidates such as Lionell Spruill ($75,000), Louise Lucas ($50,000) and Angelia Williams Graves ($30,000).
Trevor Metcalfe, 757-222-5345, trevor.metcalfe@pilotonline.com