OCC, NOPEC Request Rejection of Dominion Energy’s $600 Million Rate Increase Settlement with PUCO Staff
By Rachel Duthie on October 8, 2020
SOLON, OHIO – The Ohio Consumer’s Counsel (OCC) and the Northeast Ohio Public Energy Council (NOPEC) this week called on the Commissioners at the Public Utilities Commission of Ohio (PUCO) to reject an August 31 settlement between Dominion Energy Ohio (DEO) and PUCO Staff. The settlement would allow the utility to charge customers up to $600 million in a new rider over the next five years, starting this winter. OCC and NOPEC objected to the proposed settlement because, among other reasons, it would grant DEO an “unreasonable 9.91% rate of return that would result in a $97 million windfall for Dominion—all at consumer expense.” The consumer advocates also object to imposing a large rate increase on Northeast Ohio gas customers now during the COVID pandemic that has resulted in many NEO families facing serious financial struggles.
According to briefs filed by OCC and NOPEC on October 5, the “settlement would allow Dominion to charge customers more than $80 million over the next year (about $46 per residential customer) and about half a billion dollars ($560 million) more in the following four years (eventually reaching a charge of up to $90 per year).” Dominion is seeking the rate increase for capital costs, namely, investments it made and will make for buildings, pipeline extensions, gas service lines, fleet vehicles, and other expenditures.
“It is unjust, unreasonable and, frankly, unconscionable, that DEO’s customers’ CEP rates will be based on the 6.50% cost of debt approved in DEO’s 2007 rate case, when DEO this year refinanced its debt to pay just 2.25%,” NOPEC, Ohio’s largest nonprofit energy aggregator, stated in its brief this week.
“By refinancing, DEO currently is reaping windfall profits of $34.4 million per year, all of which they plan to keep as additional profits for the company. And now, under the proposed stipulation in this new case, not one dollar of this $172 million of windfall profits the company will enjoy over the five years of this rate increase will be used to reduce customers’ rates,” said Chuck Keiper, NOPEC Executive Director.
“It is inequitable to add $80 million in new charges to customers’ bills during the coronavirus pandemic and financial emergency,” said Ohio Consumers’ Counsel Bruce Weston. Dominion’s customers “could be charged an additional $560 million from 2021 to 2025 when many of the negative health and financial effects of the coronavirus will still be affecting Dominion customers,” Weston continued.
OCC asks the PUCO to deny, or modify, the settlement to provide customers benefits to pass through DEO’s lower debt refinancing costs and operational savings since the PUCO last set DEO’s base gas rates 12 years ago. NOPEC requests that the PUCO reject the stipulation in its entirety. Instead, the PUCO should order DEO to seek recovery of its CEP assets and deferrals in a traditional distribution base rate proceeding to be filed in 2021, NOPEC stated.
About the Northeast Ohio Public Energy Council
NOPEC is a non-profit energy supplier in Northeast Ohio that provides competitive energy cost savings to residents and small businesses using a buy in bulk method. NOPEC negotiates for lower energy rates and better terms and conditions, educates residents and customers on how they can conserve energy and save even more on their energy bills and advocates for consumer-friendly energy legislation at both the state and federal level. Since 2001, NOPEC has saved Ohio consumers hundreds of millions of dollars on their energy costs. NOPEC has also awarded over $34 million in community energy-efficiency grants.
About the Office of the Ohio Consumers’ Counsel
The Office of the Ohio Consumers' Counsel is the state’s representative of residential utility consumers, for 4.5 million Ohio households. The state agency serves Ohio consumers in state and federal proceedings affecting their electric, natural gas, telephone, and water services. The agency also educates consumers about their utility services. For more information, please visit the agency’s website at www.occ.ohio.gov.Tags: NOPEC, OCC, PUCO, Rate Hike