For Release: September 10, 2009
Contact: David Clementson
Email: dclementson@oag.state.va.us
Phone: 804-786-2071
Attorney General’s Role As Consumer Counsel in Electric Utility Rate Cases
RICHMOND – Attorney General Bill Mims responds to comments regarding the Office of the Attorney General’s role under state law as consumer counsel in electric utility rate cases before the State Corporation Commission.
Attorney General Mims stated, “In 2007, in response to sky rocketing prices for energy in the marketplace and the need to encourage and support investment in new energy infrastructure in Virginia, the General Assembly ended their experiment with de-regulation and re-regulated Virginia’s electric utilities. This change passed with overwhelming bipartisan majorities in both houses of the General Assembly and was signed into law by Governor Kaine. As a result, Virginia’s electric utilities are, once again, regulated monopolies, entitled by law to charge rates that allow them to recover their costs plus a reasonable rate of return. They must apply to the State Corporation Commission for any rate increases they seek, and the Commission approves their rates, as the Commission determines to be appropriate.
The Attorney General does not approve rate increases.
The Office of the Attorney General of Virginia, by statute, advocates on behalf of consumers in rate cases before the State Corporation Commission. In that role, we carefully and thoroughly review every application for rate increase to make sure no increase is imposed on rate-payers in excess of what the law requires. From 2006 to 2008, APCo requested over $600 million in rate increases. The Attorney General successfully limited those increases to little more than half of that amount, saving consumers nearly $300 million. In addition, the company sought another $3 billion for a “clean coal” powered plant in West Virginia. The Attorney General recommended that the SCC deny the request because it was too expensive, experimental, and not proven to be necessary to meet the demand of APCo’s Virginia customers. The SCC agreed, and did not approve the project.”
Attorney General Mims concluded, “As Chief Deputy to Attorney General McDonnell, and at the request of the leadership of the General Assembly, I worked with senior representatives of the Kaine administration to bring together interested constituencies and negotiate the re-regulation legislation. This was done with the understanding that the Office of the Attorney General – at all times – represents Virginia’s consumers. The new law set out when and how the utilities may petition the SCC for rate increases to recover their costs. It includes consumer protections, as well as incentives to the companies to build the new generation facilities needed to meet anticipated increases in consumer demand for electricity over the next decade. Investment in new generation facilities is necessary to keep the cost of electricity to Virginia’s homes and businesses low over the long term.”
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