Virginia groups pushing for changes to laws governing utility mergers

Virginia needs to strengthen state laws governing the review process for the proposed $66.8 billion purchase of Dominion Energy by the Florida-based NextEra Energy.

This is the push of a coalition of 36 organizations representing consumer protection, environmental advocacy and industry groups who sent a letter to Gov. Abigail Spanberger and State Senate and House of Delegates leadership on Monday.

“As Virginia remains at the center of unprecedented data center growth, regulators must carefully examine who stands to benefit from this merger and who bears the risk,” said Dana Wiggins, the director of economic justice at the Virginia Poverty Law Center.

“Utility customers deserve a process that fully evaluates the long-term impacts on rates, reliability, and service quality, and any approval should require clear benefits for the Virginians who ultimately pay the bills,” Wiggins said.

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The letter warns that the current framework for the State Corporation Commission to review utility mergers is not built for something this big – the combined company would have a market cap at $249 billion, which would make it the largest regulated electric utility on the planet, and overall, the third-largest company in the energy sector, behind fossil fuel giants Exxon Mobil and Chevron.

Per the letter, state law only gives the SCC 60 days to approve or reject the proposed merger, and does not require the applicants to demonstrate that the proposed acquisition is in the best interest of Virginian utility customers.

“An electric utility merger of this size and scale is unprecedented, and anyone who pays an electric bill in Virginia deserves for state regulators to have the time and resources to get this right,” said Blair St. Ledger-Olson, director of advocacy and campaigns at the Virginia League of Conservation Voters.

“A rushed, flawed process has the potential to hurt ratepayers and undermine our transition to affordable, clean energy progress at a time when we’re already grappling with high electric bills and how to best meet our rising energy demand. Virginia decision-makers must ensure this deal benefits ratepayers instead of burdening them further,” St. Ledger-Olson said.

The groups, in their letter, are calling on the governor and state legislators to extend the SCC’s review period to no less than 12 months for covered transactions of this scale, and to clarify the existing review standard to ensure it serves the public interest.

The coalition stressed in the letter that its request would neither prejudge the outcome of the merger review nor preclude its approval – that what they’re asking is to just ensure that regulators have the time and authority to scrutinize a transaction of unprecedented scale with the same rigor that peer states already apply to far smaller deals.

“Given what is at stake, Virginians deserve a review process with the time and the legal standard to actually protect their interests,” said Brennan Gilmore, the executive director at Clean Virginia. “The General Assembly wrote these rules, and it’s up to the General Assembly and governor to update them before this process moves any further.”