RICHMOND, Va. (AP) - A new law that suspends regulatory reviews of Dominion Virginia Power's rates for several years faces a possible constitutional challenge as critics contend it could net the electric monopoly more than $1 billion in excessive profits.
The Virginia Committee for Fair Utility Rates, a group of large industrial customers of Dominion, filed papers with state regulators last month indicating that it intends to file an appeal with the Virginia Supreme Court over whether the law violates the Virginia Constitution.
Last year, Dominion helped enact a major revision of electric utility regulation in Virginia. It effectively freezes the company's base rates, which make up the majority of a customer's bill, until at least 2023 unless the company seeks an emergency increase. The legislation passed the General Assembly by a large majority and was signed by Democratic Gov. Terry McAuliffe.
The company said the law provides a "needed transition period" while Virginia sorts out how to deal with new federal pollution rules under the Clean Power Plan.
Critics of the law, including Democratic Attorney General Mark Herring, said the legislation could let Dominion charge excessive rates worth hundreds of millions of dollars a year with no recourse for its customers.
Dominion, the state's largest electric utility, is widely viewed as the most politically powerful company in Virginia.
State Corporation Commissioner James C. Dimitri questioned the law's constitutionality in a dissenting opinion in Dominion rate case order issued late last year.
Dimitri said the law, known as Senate Bill 1349, has illegally fixed Dominion's rates and stripped the SCC of its proper authority.
"Senate Bill 1349 draws a bright line for regulating base rates: The legislation has fixed the level of base rates and prohibited the commission from reducing them under any circumstances," Dimitri wrote, adding that Dominion customers could be forced to overpay more than $1 billion over the next seven years.
Following Dimitri's opinion, the Virginia Committee for Fair Utility Rates asked the commission's other two members to weigh in on whether they thought the law was constitutional. They declined, prompting the potential appeal to the state's highest court.
The Virginia Committee for Fair Utility Rates has several months before it is required to file an actual appeal with the Virginia Supreme Court. Other groups that opposed Senate Bill 1349 could join in.
Dominion spokesman David Botkins said Senate Bill 1349 does not violate the Virginia Constitution. He said similar rate freezes have been enacted in the past 15 years and "those statues were never called into question."
"The new law is clear and intended to protect citizens and businesses. Our customers deserve that," Botkins said.
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