Dominion Energy Inc., the U.S. utility giant that came under fire for overcharging its customers by almost $380 million, wants to keep the money and spend it on grid upgrades.
The Virginia power company proposed using some of the extra cash to help install almost a million smart meters, create an online “customer information platform” and add more devices to the grid that could help prevent blackouts. It’s part of a plan that the state rejected in January, calling it too costly. The utility has come back with a more modest proposal and a smaller price tag of $594 million, down from more than $1 billion.
It’s the latest twist in the saga over Dominion’s massive overcharges in 2017 and 2018, which were flagged in a Virginia state report in August. Infuriated consumer advocates have called on the company to return the money to no avail, and one ratepayer group staged a “Rally for Our Refunds” in Richmond three weeks ago.
Like most power companies, Dominion is allowed to only earn a certain amount. Some utilities have returned extra cash to customers in the past if earnings exceed the threshold. The latest fight in Virginia is centered on a state law passed last year that allows electricity providers to keep some excess profits so long as they re-invest the money in renewable projects or grid upgrades.
“Our feeling on that is our customers have been telling us they want more solar and wind and more reliable service,” Dominion spokeswoman Audrey Cannon said by phone. “And we’re responding to that by investing in renewable power and upgrading our grid.”
Analysts attributed much of the excess income to warmer-than-normal weather in Virginia last year, which led to stronger electricity sales. The state report showed that the money came from Dominion’s power-generation business, rather than its distribution system.
“If the weather is warmer than normal and you sell more electricity than normal, you’re going to overearn,” said Charles Fishman, a utilities analyst at Morningstar Inc.
Shares of the company were down 0.4% at $80.76 at 11:20 a.m. New York time. They have risen about 13% in 2019.
Earlier this month, Richmond-based Dominion filed an unprecedented proposal that would have customers paying for a $7.8 billion wind farm off Virginia’s coast. It would be the biggest in America, powering 650,000 homes.
Dominion’s $594 million grid plan will need approval from the Virginia State Corporation Commission. The company is proposing to cover about half of the cost with some of the extra cash and recover the rest through customer rates. The program would help deploy the customer platform and smart meters through 2021.
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