For media inquiries only, contact: Brian J. Gottstein
Email: firstname.lastname@example.org (best contact method)
Attorney general to study effectiveness of revenue enhancements offered to investor-owned electric companies
~Cuccinelli seeks stakeholder input to review effect of a system established in 2007 which offers revenue enhancements to investor-owned electric companies for undertaking certain projects or meeting certain benchmarks~
RICHMOND (July 19, 2012) -Attorney General Ken Cuccinelli announced today that his office is reviewing the effectiveness of revenue enhancements offered to electric companies under a 2007 law if the companies undertake certain projects or meet certain goals specified in the law. Known as "adders", these bonuses increase the return on equity that an electric utility is authorized by the State Corporation Commission to receive.
The attorney general serves as counsel for consumers in electric rate cases and is conducting the study as part of his office's statutory responsibility to consult with the State Corporation Commission on a report regarding the 2007 Electric Utility Regulation Act.
Although there have been a variety of causes for electric rate increases over the years, including the cost of compliance with federal environmental regulations, that are beyond the control of state legislators, regulators, and even the utilities, Cuccinelli says he wants to review the impact of state laws on rates and whether or not the adders' benefits to customers outweigh the costs now that five years of data is available.
"As the price for electricity has increased, citizens across Virginia have asked why," said Cuccinelli. "While a large portion of the increases Virginians have felt over the last several years are directly attributable to federal regulations, it is important for us to review the impact of Virginia's laws -which we can control-on the cost for electricity. We have to do this so we can assure Virginia homeowners and businesses that the prices they pay for electricity are no more than what is reasonably necessary."
Electric rates for many Virginia citizens have steadily increased over the past several years. Rate increases have been dramatic for some, while more gradual and perhaps less noticeable for others. There have been a variety of causes, including the cost of compliance with federal environmental regulations that are beyond the control of state legislators and regulators.
The review will solicit input from various sources, including legislators, citizens, environmental groups, industrial customers, and the electric utility companies. "The goal is not to reach some predetermined result, but rather, to have a thorough review of what the goals were of having the adders in the first place, what has actually happened as a result of the adders, and what they have cost in terms of higher electricity prices," the attorney general said. In short, with five years of data to review, the goal is to conduct a cost-benefit analysis of each of the adders to make sure Virginians are getting value for their money."
Cuccinelli anticipates the information will be collected through the end of summer, with his office issuing a report on the findings sometime in the fall.
# # #