McAuliffe Backs Scrapping Deal that Protects Dominion Power from Rate Review

RICHMOND – Gov. Terry McAuliffe (D) on Thursday said he supports scrapping a two-year-old deal that shields Dominion Power from rate reviews, saying the rationale for protecting the utility will be lost if the Trump Administration does away with the federal Clean Power Plan.

State Sen. Chap Petersen (D-Farifax) looks at the vote tally board during the Senate session at the Capitol in Richmond, Va., Thursday, Jan. 12, 2017. (AP Photo/Steve Helber) (Steve Helber/AP)

McAuliffe (D) made the remark after Fredericks, who has been broadcasting his show from different locations on Capitol Square during the legislative session, asked him about an already defeated bill on the subject.

“The reason we did this, let’s be fair, I mean, was because of the Clean Power Plan and the increased costs that would come with the Clean Power Plan,” McAuliffe said in an interview on the John Fredericks Show, a conservative talk-radio program. “From what I read and from what I hear from Washington from President Trump and his new proposed EPA administrator, the Clean Power Plan is going to go away. … If we don’t have those increased costs because of the Clean Power Plan, then (protection for Dominion) should be off the table.”

Proposed by state Sen. J. Chapman “Chap” Petersen (D-Fairfax), the measure had been aimed at undoing a 2015 law that froze base electricity rates in Virginia for five years. The law also shields utilities from rate review through 2019 while preserving their ability to seek rate hikes.

Dominion and Appalachian Power Co., the two utilities that supply virtually all electricity in the state, said at the time that they needed rate protection from the anticipated costs of complying then-President Obama’s Clean Power Plan. The 2015 protection measure, the subject of a pending lawsuit filed on behalf of rate-payers, was sponsored by state Sen. Frank Wagner (Virginia Beach), who is running in a crowded Republican primary for governor.

Dominion is the largest corporate contributor in Virginia, having plowed $4 million into state-level races over the past decade.

McAuliffe had signed the 2015 bill into law, but on Thursday he told Fredericks he agreed with Petersen that those protections will not be needed if the power plan goes away. His comments came as two other candidates running to succeed the term-limited governor – Republican Denver Riggleman and Democrat Tom Perriello — have incorporated populist-style attacks on Dominion into their campaigns.

“I support Chap Petersen on this,” McAuliffe said.

His answer seemed to surprise Petersen, who was part of the conversation because his office served as Fredericks’s makeshift radio studio for the day.

“Oh my God,” Petersen said. “Thank you, governor.”

Dominion spokesman David Botkins said the 2015 legislation also prompted the company to make expansions into solar energy and should stay in place.

“Virginia’s energy plan has provided direct benefits to all customers in the form of an immediate rate cut in 2015 and ongoing assistance to low-income customers, seniors, the disabled, and military veterans,” he said in an email. “The legislation has saved customers millions of dollars in costs while keeping Dominion’s rates well below the national average — lower now than before the energy plan was passed.”

As a practical matter, McAuliffe’s statement of support does nothing to revive Petersen’s bill, which died in committee. Even if Petersen thought the governor’s support would help his cause, it is too late for him to submit a new bill. His only option would be to turn his bill into an amendment that could be attached to another piece of pending legislation, a move that would be open to challenge if his amendment is not germane to the underlying legislation.

As governor, McAuliffe is free to propose legislation at any time. On the radio program, Petersen encouraged him to do just that.

“Governor, you need to send down the legislation,” Petersen said.

McAuliffe asked if Petersen could round up enough votes to pass it.

“I tell you what, you send it down and tell the Democrats what to do, they’ll follow [your] lead,” Petersen said. “They usually do.”

McAuliffe spokesman Brian Coy said later that the governor does not intend to send propose a bill.

Article Courtesy of Laura Vozzella, covering Virginia politics for The Washington Post. Follow @LVozzella