Delegate Lee Ware’s House Bill 167 would protect customers from paying for expensive and unnecessary pipeline infrastructure on their electric bills. The bill ensures the State Corporation Commission gets to review electric utilities’ contracts to reserve space or “capacity” on gas pipelines. If the SCC finds the utility does not need an additional fuel resource or that new capacity is not the lowest-cost option for meeting energy needs, then the costs of these contracts cannot be passed on to customers. This could save customers billions of dollars.
Ask your senator to support HB 167
In Virginia, electric utilities buy space on gas pipelines, and they pass the cost of those contracts on to consumers — even if they never use the pipeline and even if lower-cost alternatives exist. Interstate natural gas pipeline capacity contracts are multi-billion dollar, multi-decade commitments. The SCC has always allowed Virginia utilities to pass these costs on to their customers in the past.
HB 167 would protect customers from paying these costs in the future, unless they are absolutely necessary. While the bill does not prevent any company from building a pipeline, it does ensure that pipeline developers bear the risk of a new pipeline investment, rather than placing that risk on customers.
The energy landscape in Virginia is changing, and arguments that massive new gas pipelines are necessary to meet our energy needs are simply not bearing out. The SCC has recently acknowledged that electricity demand is flat or even shrinking in Appalachian Power territory, and the agency rejected Dominion Energy’s latest projections of growing electricity demand as “consistently overstated.” Dominion already has multiple capacity contracts on several different preexisting pipelines. The SCC found in 2018 and 2019 that Dominion’s existing capacity contract portfolio is sufficient in size for its electric generation fleet.
If your electric utility wants to charge you for the costs of more pipeline capacity, it should have to prove to state regulators that it is needed and that it is the lowest-cost option for meeting your needs.