NO SINGLE BILL under consideration in Virginia would
have an impact so
widely and personally felt as legislation setting
rules under which Dominion
Virginia Power would operate, provide electricity
and set rates for the
state’s 2.1 million paying customers. Yet the
legislation before the General
Assembly, which will govern how much the large
majority of households and
businesses in the state pay for electric power, has
been a stunningly rushed
and closely held affair. Originally drafted by
Dominion itself, then pored
over by a handful of stakeholders for 60 hours over
13 days in a conference
room in the state capital, the measure has been
subject to no statewide
hearings, limited public scrutiny and little outside
analysis. What,
exactly, is the rush?

Part of the explanation is that Dominion, despite
its vast influence (and
heavy political contributions) in Richmond, feared
that the political mood
was turning sour. Spooked by drastic rate increases
in Maryland, a few
Virginia lawmakers were drafting bills that would
resurrect the rules under
which Dominion and the state’s other utilities did
business before
deregulation began in 1999. (Electricity
deregulation, which failed to yield
the much-promised competition, has been a flop.)
Seizing the initiative,
Dominion offered up its own plan which, after
negotiations under the
auspices of the state attorney general’s office, was
unveiled at the end of
January. Given that the General Assembly adjourns in
two weeks, that left
little time for lawmakers, consumers,
environmentalists and other interested
parties to get a handle on it.

The resulting legislation is touted as
“re-regulation.” In fact it is a
hybrid that bears scant resemblance to the pre-1999
regime that did an
adequate if imperfect job of providing safe,
efficient and dependable
electrical service at reasonable prices. In place of
the old, cost-based
regulation that ensured reasonable earnings, the
Dominion-backed proposal
holds out the prospect, if not the promise, of much
larger, and possibly
massive, profits. What’s more, the state’s
regulatory muscle — to turn back
proposed rate increases, for instance — would be
severely limited.

The question is whether this is justified. Dominion
and its allies point to
dramatically surging electricity demand in Virginia,
which the firm says it
can meet only by building major new generating
capacity (meaning nuclear
power plants). To provide the risk incentives for
such huge infrastructure
investment, Dominion contends that it (and its
lenders) will need something
close to a guarantee of handsome profits in the
future. Its earnings under
the old regulatory system just won’t do, says the
firm.

We can’t say flatly that’s wrong. It’s true that
demand is growing at a
dizzying pace. But whether Dominion’s legislative
proposal is fully
justified is a question that should invite more
scrutiny. Virginia has
subjected legislation of much less consequence to
far greater review. This
bill deserves at least as much.

Washington Post Editorial