RICHMOND, VA — Governor Abigail Spanberger today — in expert testimony filed with the State Corporation Commission (SCC) on behalf of the Office of Governor — called on NextEra Energy and Dominion Energy to freeze residential electricity rates for six years and triple monthly customer bill credits as conditions of any merger.
The Governor urged the SCC to reject the proposed $67 billion merger in the absence of these and other guarantees and additional binding commitments to protect and preserve Virginia jobs, lower energy costs for families, and accelerate Virginia’s progress toward producing affordable, reliable, local, and clean power into the future.
“Any proposed merger involving Virginia’s primary state-regulated utility must benefit families, small businesses, and Virginia’s workforce — not just the shareholders of these multi-billion-dollar corporations,” said Governor Abigail Spanberger. “That’s why I am calling for a six-year freeze to Virginians’ base residential electricity rates, a tripling of monthly bill credits for ratepayers, and additional commitments to lower energy costs and meet our long-term clean and homegrown energy goals if the State Corporation Commission is to approve this merger.”
Governor Spanberger continued, “As Governor, I will continue to advocate aggressively on behalf of Virginians over the coming months, and I remain deeply skeptical that the proposed $67 billion merger, as currently structured, will adequately protect consumers and deliver meaningful public benefits. Without enforceable commitments that meaningfully prioritize ratepayers, lower energy costs, protect Virginia’s utility workforce, and advance Virginia’s energy goals, the State Corporation Commission should reject this merger.”
As a condition of approving this transaction, the Governor is also calling for additional commitments to put Virginia’s families, workers, and ratepayers first. These include reforms to lower the share of costs borne by residential customers, stronger protections against utility disconnections for Virginians, and greater investments in energy efficiency and locally generated clean energy.
The Governor is also seeking structural reforms to ensure large data centers bear the cost of their own energy needs — not families — and expand rooftop solar by eliminating the program’s cap. Critically, these commitments must be backed by strong enforcement provisions from the SCC that hold these companies accountable for their promises to Virginians and their workers.
“With the commitments made in the original filing and supplemental testimony, Dominion and NextEra have not yet satisfied the legal standard that would allow the Commission to approve this transaction,” said Chief Energy Officer Josephus Allmond. “This testimony lays out the bold actions that will be required in this transformative moment to ensure just and reasonable rates for Virginia customers resulting from the proposed merger.”
Dr. Richard McCann — a leading expert on energy, water, and environmental policy — provided expert testimony on behalf of Governor Spanberger and Chief Energy Officer Allmond. Dr. McCann has consulted on environmental and energy resource economics and policy since 1985, testifying more than 50 times before numerous regulatory agencies as well as in trial and arbitration cases. Dr. McCann also testified before the Federal Energy Regulatory Commission in the California Energy Crisis Refund Proceeding.
In August, Governor Spanberger formally filed a Notice of Participation as Respondent, becoming the first Governor of Virginia to intervene at the SCC. The Governor announced her decision to intervene in the proposed merger in a Washington Post op-ed — laying out three non-negotiable priorities: delivering more affordable energy bills for Virginians, protecting Virginia’s utility workforce, and accelerating Virginia’s progress toward producing affordable, reliable, local, and clean power into the future.
As a party to the case, the Governor and her Administration have the legal right to engage, bring concerns forward, request detailed information about the proposed merger, and make clear that Virginians expect to see long-term, tangible benefits of any potential deal.
Read below for a summary of the filing with the State Corporation Commission.
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Summary of the Direct Testimony of Richard McCann on behalf of Governor Spanberger and Chief Energy Officer Allmond
My testimony evaluates the Joint Petition to determine whether the commitments made will ensure that “just and reasonable rates will not be impaired or jeopardized” and are otherwise in the public interest. I conclude that the Joint Petitioners, through the commitments made in the Joint Petition and Supplemental Testimony, have not yet met that standard.
In order for the Commission to approve the proposed transaction, the following additional ratepayer-related commitments should be made:
- Residential Rate Freeze for Six Years: There cannot be an increase to base rates for three rate case cycles.
- Triple Ratepayer Benefit: This would make the rebate $29 per month for four years.
- Fixing Dominion’s Capital Structure: The debt share in Dominion’s capital structure must be increased from 48% to 60% to reduce the Company’s rate of return.
- Requiring the “Probability of Dispatch” Method: This change reduces the residential share of relevant costs by 25%.
- Improved Disconnection Policies: Extend disconnection protections to households with infants, those with serious medical conditions or inability to pay due to financial hardship, and during high Air Quality Index days.
In order for the Commission to approve the proposed transaction, the following additional clean energy-related commitments should be made:
- Energy Efficiency and Distributed Energy Resources Prioritization: Energy Efficiency and distributed energy resources must be designated as the first priorities for meeting forecasted loads in all resource planning and acquisition activities.
- Formation of a Zero-Carbon Energy Generation Company: A new separate subsidiary must be created and headquartered in Virginia for building zero-carbon energy generation to serve large data centers that is financially walled off from the rest of customers.
- Creation of a State Energy Efficiency Utility: An independent energy efficiency utility should be recommended to the General Assembly to meet our energy efficiency goals.
- Decarbonization Incentive Rate: A decarbonization incentive rate must be established for electrified uses like heat pumps to replace furnaces and electric vehicles to replace fossil-fueled cars.
- Eliminating Rooftop Solar Cap: The elimination of the cap on the net metering program should be recommended to the General Assembly to spur more local energy generation.
Mandatory, Comprehensive Enforceability provisions must be imposed to hold the Joint Petitioners fully accountable for any violation of commitments, including the labor and workforce commitments.
Unless these additional commitments are substantially addressed or alternative solutions are identified, the Commission should reject the joint petition.
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Click here to read the full filing with the State Corporation Commission.
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