POLITICS
02/13/2018 12:46 am ET Updated Feb 13, 2018

Virginia Democrats Score A Surprising Win Against Powerful Utility Monopoly

The GOP majority was evidently unprepared.
Virginia Del. David Toscano (D) led his caucus to vote for an amendment protecting consumers from a form of price gougin
The Washington Post/Getty Images
Virginia Del. David Toscano (D) led his caucus to vote for an amendment protecting consumers from a form of price gouging at the hands of Virginia's utility monopolies.

RICHMOND, Va. ― It was supposed to be an uneventful Monday evening in Virginia’s House of Delegates ― another moment for lawmakers from both parties to come together in the spirit of bipartisanship to give free rein to the state’s two electric power monopolies, Dominion Energy Virginia and Appalachian Power.

Instead, six House Republicans joined all 49 Democrats to pass an amendment that placed a serious check on the monopolies’ power mere days after their colleagues in the Senate decided to give them a blank check.

The vote demonstrated the desire of a Democratic caucus that has sometimes been criticized for its coziness with the monopolies to heed the populist appeals of its constituents.

“It’s clear that the grassroots will not stand for business as usual. Now is the time to continue pushing to ensure ... that the regulated do not become the regulators,” said Virginia Del. Sam Rasoul (D), a leading monopoly critic in the House.

For Dominion, which, as the larger of the two utilities and top campaign donor, is sometimes considered the most powerful force in Virginia politics, the defeat was especially humbling.

“I’ve never seen Dominion lobbyists look so sad,” said a senior Democratic aide in the legislature who requested anonymity to speak freely.

If Dominion had had its way, the House would have followed the state Senate’s lead. On Friday, the state’s upper chamber handily passed a bill that would, among other things, permit Dominion and Appalachian to reinvest their over-earnings into renewable energy and grid modernization projects in lieu of providing refunds to their ratepayers.

The vast majority of outside experts, including the office of Virginia’s attorney general and the State Corporation Commission, which oversees the monopolies, maintained that the scheme would enable “double dipping,” or charging ratepayers twice for the same infrastructure investments. Dominion and Appalachian would be allowed to take from the refunds owed to ratepayers ― that’s one dip ― and then still charge them higher rates to finance the same projects ― that’s the second dip.

A bipartisan group of state senators got together to propose an amendment that would have specifically barred the companies from charging ratepayers a second time, but it got shot down by a wide margin. Senate Democratic Leader Dick Saslaw had insisted that Dominion’s assurances were more than enough to go on, so why muck up the bill with a useless clause?

On Monday night, however, Saslaw’s counterpart in the House, Democratic Leader David Toscano, a delegate from Charlottesville, introduced a nearly identical bill barring double-charging. 

More important, in his speech Toscano appeared to call the bluff of Dominion’s backers. He challenged opponents of the amendment to explain why, if Dominion claims there would be no double dipping, it would be so bad to pass a provision explicitly ensuring just that?

“If there isn’t a double dip in the bill, passing the amendment will clarify that fact. If there is a double dip in this bill, passing the amendment will fix the problem,” he declared. 

Del. Terry Kilgore (R), a recipient of nearly $174,000 in donations from Dominion who introduced the House bill, did his best to shoot down the talking point with a folksy metaphor. 

It is not clear exactly what Kilgore meant, but he compared the bill to a car dealer offering a customer a new car for the price of an old one that the customer had returned to the dealership.

“Who’s not going to jump onto that? And that’s basically what we’re doing here,” Kilgore said.

When it came time to vote, Kilgore’s metaphor apparently wasn’t enough. The Republican leaders who control the agenda in the chamber were visibly shocked as the amendment passed, 55 to 41.

That put the majority Republicans in a politically vulnerable spot, since the vote had placed them on the record against a consumer protection amendment. 

In an apparent attempt at damage control, Del. Greg Habeeb, a Republican from southwest Virginia, claimed that the Republican lawmakers were merely concerned that the amendment amounted to legislating “on the fly.”

Republican leadership then moved to reconsider the amendment, and all the Republicans voted to pass it in a voice vote.

This is the first time I’ve seen Dominion lose on the floor. This is a game-changer. Democratic Virginia legislative aide

Whether or not Republicans succeed in averting political blowback for the vote, the legislature’s antimonopoly firebrands landed a blow against Dominion that no legislative dealmaking can undo.

“This is the first time I’ve seen Dominion lose on the floor. This is a game-changer,” the Democratic aide said.

The House was going to pass the utility rate bill well before Monday night’s amendment. It’s still expected to pass the legislation when it comes up for a final vote on Tuesday ― perhaps by an even wider margin than it would have otherwise.

And the amended legislation still has its critics, many of whom are unhappy with provisions of the bill that limit the factors the SCC can consider when evaluating the utility companies’ infrastructure projects.

However, as it stands, the amended bill protects ratepayers from the risk of price gouging that consumer advocates considered especially egregious.

Dominion still has plenty of legislative maneuvers it can use to strip the amendment from the bill before it gets to the governor’s desk. The House and Senate bills will likely need to be reconciled in conference committee, another opportunity for backroom pressure.

But in a state swimming in Dominion’s generous campaign contributions, every little setback counts.

What’s more, the state’s House Democrats, 16 of them freshmen, have shown their willingness to publicly break with Virginia’s moderate Democratic governor, Ralph Northam. Northam gave the bill its blessing without the amendment, and a spokesman from his office told The Washington Post that the “double dipping” issue had already been resolved. 

Democratic House Leader Toscano voted to advance the original legislation out of the Labor and Commerce Committee without the amendment.

But in the past two weeks, he and other lawmakers received an outpouring of feedback from individual constituents and grassroots groups who were infuriated by the double dipping.

Many of the same local progressive groups that materialized spontaneously in the wake of Donald Trump’s election — and helped flip 15 Virginia House seats in November — took the lead in pressuring lawmakers to oppose any bill that allowed the utilities to double-charge.

One such group, Network NOVA, demanded that lawmakers “#KillTheBill” in online appeals for activists to contact their lawmaker.

A widely circulated meme the group shared focused on “double dipping.”

“When Dominion writes the law: we pay twice, they get richer,” the meme said.

Toscano conducted a SurveyMonkey poll of members of his constituent email list and found widespread opposition to the double-dipping provision, even as a majority still favored the bill as a whole.

The freshman Democrats also played a key role in stoking skepticism about the utility monopolies within the caucus. Virtually all of the new House Democrats campaigned against Dominion’s influence. Thirteen House Democrats even signed a pledge promising to refuse donations from Dominion or Appalachian. 

The freshman Democrats “were asking very detailed questions about the technical elements of this bill,” Toscano said.

“It’s one thing to campaign and take positions, it’s another thing to try to govern,” he continued. “And when you have to figure out how to govern, you’ve got to look at the nuances of this bill. And that’s what these freshmen were doing.”

During the day on Monday, Toscano whipped the members of his caucus to vote in unison for the amendment to prevent the double dipping.

“This is a new dynamic right now,” the Democratic leader concluded. “It’s a function of some of these new people and in general some of the populism of the time.”

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