Walmart, SC environmentalists are pushing back on Dominion electric rate hike request
In the first day of a nearly week-long hearing over Dominion Energy’s electricity rates, the utility received push back on Tuesday from a big-box store chain, environmental conservationists and a seniors advocacy group over a proposed price hike.
Dominion is asking the Public Service Commission to approve a 7.7% rate increase for its 753,000 South Carolina customers where the average residential customer would see a $9.68 increase per month. The Virginia-based company, which acquired SCANA in 2019, said the additional money is needed because of improvements made to the system since 2012 to ensure reliability.
Dominion purchased SCANA after the Cayce-based utility partnered with Santee Cooper in a failed $9 billion V.C. Summer nuclear plant expansion project.
But Dominion’s request comes at a time when the COVID-19 pandemic has wreaked havoc on the economy.
“Dominion Energy is fully aware of the times within which we all live and we know that the pandemic has been hard on everyone,” said Dominion attorney Chad Burgess. “It’s been tough mentally, it’s been tough physically, and without a doubt it’s been tough financially.”
But, he added, Dominion is a reliable utility for keeping the power on, or bringing it back quickly during an electricity outage. That reliability is because of $3.2 billion in system infrastructure improvements since 2012, Burgess said. “It’s indisputable that customers are enjoying the benefit of these assets.”
Dominion is asking to have a 10.25% profit margin, the same margin approved in 2012. Burgess said the company only has been bringing in 5.9% return on its equity.
“An actual return of 5.9% is far too low to support the safe and reliable manner in which Dominion Energy operates its electric system, and which our customers have become accustomed to over the years and expect from us,” Burgess said.
During its opening statement, the Office of Regulatory Staff, a state utility watchdog, said Dominion’s requested profit margin exceeds national averages and return on equities approved by the PSC.
In the last fiscal year, the PSC approved a 9.5% return on equity for Duke Energy Progress and Duke Energy Carolinas. In the 12-month period that ended on Sept. 30, Duke Energy Carolinas reported a 5.82% profit margin. Duke Energy Progress had a 3.95% return on equity, according to documents provided by ORS.
Large stakeholders in the state also pushed back against Dominion’s request.
Big box retail chain Walmart objected to Dominion’s request saying its requested profit margin is too high, citing the current economic climate.
Walmart attorney Stephanie Eaton called on the PSC to OK a rate of return closer to the median return on equity.
Kate Mixson, a lawyer for the South Carolina Coastal Conservation League, advocated for low-income residential customers during the day’s opening statements, objecting to the increased flat rate charges. Higher fixed charges reduce the incentive for customers to be more energy efficient or try to lower energy costs, such as putting in rooftop solar panels.
”We are concerned that Dominion’s proposal could further exacerbate affordability issues, both in the short and long term and ask the commission to keep affordability in mind over the course of these proceedings and reject the proposed increase to the residential basic facilities charge,” Mixson said.
The AARP also objected to the increase flat charge for the utility’s fixed expenses. Instead the the AARP said the those charges should be based on a customer’s usage.
“Not only is this an unpopular way to charge residential customers, it takes away the control that customers have over their bills discouraging conservation,” said John Coffman, an attorney for AARP.
The Sierra Club has concerns Dominion continues to rely on coal energy, and said the utility needs to conduct an economic analysis of its coal plants.
“Now if these coal plants are already losing money, and likely to continue to lose money into the future, then this commission and the ratepayers need to know that before it commits more ratepayer money to keeping these coal plants online, especially in the current economic climate,” said Dori Jaffe, an attorney with the Sierra Club.
This story was originally published January 5, 2021 at 4:12 PM.
