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Critics Warn SC Legislators Against Dominion, Citing Actions in Virginia

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Thomas Hadwin

Thomas Hadwin has for years been involved in regulatory and legislative issues related to Dominion Energy.

Energy experts and ratepayer advocates gathered in the State House April 17 with a message about Dominion Energy’s proposed purchase of SCE&G. Their message: Dominion Energy isn’t much better and could in fact be worse than SCE&G.

“[Dominion’s] Virginia experience aptly demonstrates that they can’t be trusted,” said Bob Guild of the South Carolina Sierra Club. “They’ll manipulate our legislature the same way they did the legislature in Virginia.”

As Guild and others warned about Dominion’s actions in Virginia, where the company is based, a gray-haired woman in red shoes shook her head, saying about Dominion’s dealings with Virginia lawmakers, “They bought them off.”

The Sierra Club and Friends of the Earth, two organizations advocating for ratepayer rights and renewable energy, brought in Glen Besa and Thomas Hadwin to testify about Dominion’s dominance of Virginia's energy legislation. Hadwin worked for electric and gas utilities in Michigan and New York, while Besa is the former director of Virginia’s Sierra Club. Both have been involved for years in regulatory and legislative issues related to Dominion.

“What they’ve done in Virginia, because of their incredible influence over the legislature and the governor, too, [Dominion] actually writes legislation in ways that benefit them,” Besa said.

Besa cited action that Dominion took in 2015 to freeze electrical rates. Virginia legislators and regulators went along with the idea and made the rate freeze law. Those rates were artificially inflated, according to Besa. The language of the bill took power from regulators and gave it to Dominion, Besa said.

“The bill, not only did it freeze the rate, it prohibited [Virginia regulators] from ordering refunds of the overcharge,” Besa said. “One of our [regulators] estimated the overcharge at a billion dollars. Dominion was literally pocketing a billion dollars of our money that would have otherwise been refunded to us in the name of a rate freeze.”

Hadwin said Dominion also wrestled Virginia's legislature into allowing the utility to control the advancement of renewable energy generation such as solar and wind production.

“What these holding companies [like Dominion Energy] have done is managed legislation and regulation to get the most out of ratepayers,” Hadwin said.

According to Besa, Dominion has refused to buy solar from independent producers, which could have led to lower costs for ratepayers.

“Dominion wants to control it all,” Hadwin said of the Virginia utility’s efforts with renewables. “They finally recognized that solar is the cheapest way to generate electricity. … They want to be the developers of it. It’s good for them. What that means is it just increases the price for ratepayers. If [solar’s] open for independent developers it will be cheaper for the ratepayers.”

Following the State House presentation, Chet Wade, vice president of corporate communications with Dominion Energy, said the critics’ opinions are out of step with the mainstream.

“I think they’re misinterpreting rates and charges,” Wade said. “If you compare our rates to anywhere in the region … our rates are amply lower than our peers.”

Wade also contends that Dominion’s grid does tie in with a number of private solar producers.

“In terms of universal solar and large scale we have been able to do it cost effectively in a way that the legislature [in Virginia] wants to do it so that it protects customers and provides them with renewable energy,” he said.

If Dominion is allowed to buy SCE&G, they’ve offered an average $1,000 refund to each customer to smooth over 20 years of customers paying for the unusable nuclear reactors at V.C. Summer, instead of 50 years as offered by the South Carolina utility. A new report by a leading South Carolina economist also recently came out which suggested that Dominion’s merger with SCANA would provide over $18 billion in economic output for the Palmetto State.

Besa and Guild called the $1,000 a bad deal and the potential economic output questionable.

“Those are the kind of things that in a fair and impartial and competent regulatory system we would be able to challenge and hold up to the light of the day, and we’d be able to reject as bogus,” Guild say. “But the way Dominion puts their thumb on the regulatory scale, we may never get to look at any of those facts. That’s really the rub here.”

The assertions of Dominion’s critics about the energy company’s sway over lawmakers and refusal to meaningfully push forward renewable energy may sound familiar. Sierra Club and Friends of the Earth have accused SCE&G and its holding company, SCANA, of similar conduct. Those practices, particularly the money-giving and lobbying, and the energy company writing its own laws, along with an ineffective regulatory system for the utility, led to the billion-dollar shutdown of the V.C. Summer nuclear energy plant, in the opinion of the Sierra Club and Friends of the Earth. All those strategies are meant to do one thing, Guild and Friends of the Earth’s Tom Clements assert — provide returns to investors on the backs of ratepayers. Dominion operates in the same manner, Hadwin suggested.

“It used to be a traditional balance between fair [electrical] rates and fair [investor] returns. That has really become slanted far in favor of the utilities,” Hadwin said, noting that while the economy and population has grown in Virginia the need for electricity has stayed flat or dropped, mostly due to efficiency measures.

Hadwin and Besa suggest Dominion will continue the same model of building more to charge more, just like South Carolina ratepayers see with the SCE&G’s failed nuclear project.

The ratepayer advocates left it in the hands of legislators to analyze Dominion and its Virginia practices before allowing them to come into South Carolina.

“You cannot take Dominion at face value,” Besa said. “You’re going to need some independent economist. You’re going to really spend some time, probably some money, to evaluate whatever Dominion offers. You can’t just go along with what they said, because I’m going to tell you they misrepresent the truth.”

To that, the old lady in red shoes said, “Amen. Amen.”

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