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Fact Checker: Dominion Rate Increase

All three Democrats running for governor claimed in yesterday's debate that they oppose Dominion Virginia Power's March proposal to raise electricity rates 6.9 percent to pay for equipment, salaries, plant construction and conservation projects.

That's not exactly true.

Only state Sen. R. Creigh Deeds called on the State Corporation Commission to reject the rate increase. His rivals Terry McAuliffe and Brian Moran did not.

Deeds immediately issued a press release after Dominion announced the proposal. "This is the most serious economic crisis since the Great Depression, and it's simply not the time to ask Virginia families to pay more for their monthly energy bill,'' he said. "It's time to put the middle class first again. I call on the Virginia State Corporation Commission to reject this rate increase on Virginia's working families."

At the time, Moran's campaign said that "we are concerned any time there's a proposal to raise utility costs on working families already struggling to make ends meet,'' and used the rate increase as a way to call for energy efficiency and conservation.

But yesterday, Moran was much more adamant. "Now, in terms of Dominion, I opposed their rate increase,'' he said.

Similiarly, McAuliffe only said at the time that "Dominion Power's announcement...highlights the urgent need for Virginia to invest in energy efficiency and our renewable energy sector and to develop a comprehensive statewide energy plan, like the one I've laid out."

Yesterday, he said "Why should Dominion continue to get rate hikes every time they come and get them and we're not doing anything about putting wind farms off the coast of Virginia Beach?"

By Anita Kumar  |  May 20, 2009; 6:11 PM ET
Categories:  2009 Governor's Race , 2009 Governor's Race Fact Checker , Brian J. Moran , Creigh Deeds , Election 2009 , Terry McAuliffe  
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Comments

The conflict between open competition, real or perceived, and regulated monopolies is never going to be resolved. Cost can be what ever one wants it to be, and profit is what ever one wants to pay taxes on. The larger the corporation, the more room for playing numbers around. Time and again corporations have demonstrated that they care only for themselves - either earning large profits for shareholders, and/or paying large bonuses to the management. How does one say what is fair? When a cardiac surgeon makes over $3 million a year, one wonders what makes him worth $1,500 an hour. When the CEO of a large public corporation makes $20 million a year, one wonders what makes him worth $10,000 an hour? When an oil company makes a profit of $30 billion in a month, one wonders why gas prices went up 50% that month! Where do you draw the line?

We have choice to pick which cable company entertains us - but we can not change companies, we need to change homes because in any given area, only one cable company provides service. Some areas now have satellite service, though many do not because the property has too many trees, or faces the wrong direction! FIOS is not available every where, so we still have monopolies in limited territories! Service and pricing between these are not consistent, even though they are in the same county and state. So these have become institutionalized and legitimized monopolies!

For better or worse, some form of regulation is essential and inevitable. We just need to figure out how. It is often a case of who will bell the cat.

It is most ridiculous that a power company like Dominion liberally funds all candidates - I wonder what they have given to McDonnell? Will it equal the sum of paid out to all Democrats? Once McAuliffe wins the Primary, will contributions to McDonnell rise significantly as Dominion Power probably does not want McAuliffe to win?

To pay for these contributions (which add no value to the consumer)and to provide for the elections in 2010, Dominion Power needs to raise revenues. So they get a rate increase and we poor consumers without choice cover it.

What a crying shame!

Posted by: alankrishnan | May 21, 2009 12:01 AM | Report abuse

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