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Dominion Energy to 'pause' rate hike request for 6 months due to mounting pressure

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The S.C. Office of Regulatory Staff, the state's utility watchdog agency, called on Dominion to "pause" its request for a rate hike request on Monday. File/Cindi Ross Scoppe/Staff

Dominion Energy agreed on Monday to halt its effort to increase the monthly power bills for 753,000 customers in South Carolina for at least six months after the utility came under fire for asking to hike its electricity rates during the coronavirus pandemic. 

Dominion's decision to "pause" its request will temporarily delay the company's goal of collecting an extra $178 million per year from ratepayers, who are scattered around Columbia, Charleston, Orangeburg and Beaufort. 

The utility did not make that choice lightly. It was pressured into that position by the S.C. Office of Regulatory Staff, the state's utility watchdog agency. 

Nanette Edwards, executive director of ORS, submitted a letter to Dominion and regulators on the S.C. Public Service Commission on Monday requesting a pause in the utility's rate case, which has been the subject of hearings for nearly a week. 

Edwards emphasized to the PSC the increasing spread of COVID-19 in South Carolina, the continued drag the virus has placed on the economy and the number of Dominion customers who called in to complain about the financial impact the rate hike would have on them. 

"I think we can all agree that Dominion customers are experiencing unprecedented challenges during this time," Edwards told the PSC members, who serve as judges in utility cases. 

Edwards made it clear that her agency could not force Dominion, one of the largest publicly traded power companies in the country, to drop its request to increase its electric rates by 7.7 percent. The power to do that rested solely with the executives for Dominion, which is based in Richmond, Va. 

Under state law, the PSC normally has six months to issue a ruling when a for-profit utility in South Carolina asks to raise rates. If the commission doesn't make a decision in that time, the utility gets everything it asks for in its request. 

After deliberating for an hour Monday, Dominion's attorneys announced the company would submit to ORS's demands and would stand down for the next six months.

"We are in agreement with ORS that we pause the hearing where it is at this point in time," Chad Burgess, Dominion's attorney, told the commission. "We do not think there is any benefit to continue battling one another in this proceeding." 

It's unclear what prompted Dominion to finally set aside its rate hike request now, while it is in the process of defending the request in front of the PSC. The company resisted similar calls for the rate hike proposal to postponed late last year. 

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In recent months, several members of the S.C. Legislature spoke out against the rate case during public hearings while Gov. Henry McMaster issued a statement calling the proposed rate hike an "untenable burden on many South Carolinians." 

But that political pressure didn't move Dominion's leaders at the time. Instead, the company continued to argue it needed the rate hike to boost its finances and help the utility recover money it invested in its power plants, electric lines and other infrastructure over the past eight years. 

When hearings for the rate-hike case started last week, several members of the PSC also asked Dominion's leaders whether they had considered setting aside its request for now. 

Rodney Blevins, the CEO of Dominion's utility operations in South Carolina, said the company considered it and spoke to McMaster about about his objections. But in the end the company chose to push forward with its plans. 

Blevins told the PSC at that time he didn't believe delaying the case would change anything. The political pressure on Dominion, which took over South Carolina Electric & Gas in early 2019, isn't going to disappear, he said. And the company's rate hike request won't improve just because it is delayed for six months. 

"The issue is that this doesn't get better with time," Blevins said. 

Edwards tried to recognize Dominion's priorities during the hearing Monday, while continuing her push for the utility to set aside the rate case. 

"This has not been easy on anyone. I do not mean to make light of any challenges facing the utility," Edwards said. "What I am doing today is reaching out across the aisle to Dominion and all the parties in this case." 

Burgess, Dominion's attorney, said he appreciated Edwards extending an olive branch to the company.  

Dominion, Burgess added, didn't want the public to think that the company and ORS were "two scorpions in a bottle fighting to the death." 

In a statement, Rhonda O'Banion, Dominion's spokeswoman, emphasized the company would use the next six months to try to reach a settlement with ORS and the other groups that opposed the rate hike. 

"We look forward to continued collaboration with the parties as we seek to find compromises to reach a resolution to this case. We value the input from all customers who took the time to voice their concerns. We will continue to focus on providing the safe, reliable service they depend on," O'Banion said. 

Reach Andrew Brown at 843-708-1830 or follow him on Twitter @andy_ed_brown.

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