RICHMOND – Legislation that would let Dominion Virginia Power use an accounting maneuver to potentially avoid cutting electricity rates in coming years passed a key House committee Tuesday.
House Bill 1059 targets the $570 million Dominion has spent planning to build a third nuclear plant at its North Anna complex in Louisa County, and another $5 million spent to develop off-shore wind plans. The company wants to write off 70 percent of those costs, even though it plans to proceed with both projects.
That would lower profits in the short term, and critics say it would likely allow the company to avoid a state-mandated rate cut in 2015.
That’s when the State Corporation Commission is scheduled to review Dominion’s books and see whether its profits eclipse a 10.7 percent return on equity cap the state-regulated monopoly must adhere to.
Among the organizations opposing the bill is Newport News Shipbuilding, one of Dominion’s larger customers. The shipyard is accusing the utility of trying to game the state’s regulatory system to keep rates higher than they should be.
Dominion says that’s all hypothetical, and that this bill is about sending a message: Virginia wants to move forward on nuclear and wind power.
The bill moved forward easily Tuesday, and related legislation is working its way through the state Senate. Commerce and Labor Committee Chairman Terry Kilgore is carrying the bill in the House, and his committee passed it Tuesday, 18-2.
Del. Jeion Ward, D-Hampton, the only Peninsula legislator on the committee, voted for the bill.
Dominion is a heavy hitter at the state Capitol. It has given legislators $1.7 million since 2007 and fields a team of lobbyists.
The bill helps the company move toward construction of the new nuclear plant, a process that could still get tripped up by various licensing reviews, Dominion lobbyist Bill Thomas said Tuesday. The bulk of the money spent so far has been on engineering and design, according to the company.
The bill survived an effort Tuesday to add a trigger to return money to customers if the plant isn’t built by 2024. That effort, from House Finance Chairman Lee Ware, R-Powhatan, died for a lack of support.
Newport News Shipbuilding liked the amendment. It addressed a glaring issue in the bill, according to lobbyist Stephen Haner: Dominion wants the write-off now, that will likely affect customer bills after the 2015 review, and there’s no guarantee the company will build the plant.
“They are asking us to pay now and they will decide whether to build later,” Haner said.
That’s unfair, Dominion executives said Tuesday. The company has already spent money on site preparation, Senior Vice President Thomas Wohlfarth said. It expects to win a federal license to build and operate the plant in late 2015, Thomas told the committee.
The company also faces the loss of construction incentives passed in 2007 if the project isn’t well on its way by 2018, so it has plenty of motivation to move forward, Thomas said.
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