Wednesday, February 21, 2007
Editorial: The rush to reregulate
The governor needs to act as a circuit breaker on the General Assembly's scramble to give power companies the regulation they want.
From the RoundTable blog
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Before Gov. Tim Kaine considers signing a complex electric utility reregulation scheme for Virginia, he or someone on his staff should take the time to read the bill.
Somebody needs to figure out what it would mean to Virginians' household budgets.
Lawmakers certainly have not.
Yet the bill cleared committees in both houses of the General Assembly Monday, putting it on track for final passage later this week. Then it will be on to the governor's desk, all with breathtaking speed.
The bill now moving through the legislature is a hastily revised version of a unique, "hybrid" regulatory structure that Dominion Virginia Power proposed in December. The measure would end the state's failed attempt at deregulation and restore utilities' monopoly status -- but with weaker regulation of electric rates.
After consumer advocates raised an alarm, a handful of lawmakers and utility executives worked through the weekend to revise the bill, incorporating some industry concessions. And, while rate increases are inevitable when current caps expire, proponents of the plan argue it actually will act as a damper: Generous profit incentives will attract capital to build new power plants needed to meet growing demand. An adequate supply will keep electric rates down.
So the theory goes.
The bill's backers have not shown that power companies would have trouble finding investors under the State Corporation Commission's old regulatory framework, which allowed for industry profits and protected captive ratepayers.
Consumers lose some of that protection under the new scheme. "I have no doubt," SCC Chairman Ted Morrison told the House Commerce and Labor Committee Monday, "if you pass this bill, rates are going to be higher in Virginia than they need to be."
Still, the committee passed it.
The new version does offer ratepayers protections from excessive profits that weren't in the bill before. Are they adequate? Consumer watchdogs say no.
Lawmakers do not need to rush to pass complicated legislation that covers uncharted ground.
This editorial board seldom agrees with House Republican Majority Leader Morgan Griffith of Salem. But Griffith was right to vote against the legislation in committee. He said, "I don't think it's a bad bill, but I'm not 100 percent convinced it's something we need to do today."
Griffith could use his considerable power to defeat the measure in the House. A more likely hope for consumers, though, is in Kaine's power to amend or veto this bill.
