Virginia Governor To Intervene In Dominion-NextEra Merger

Longtime Slashdot reader schwit1 shares an opinion piece from the Washington Post, written by Virginia Governor Abigail Spanberger: NextEra Energy, a Florida-based utility company, has filed paperwork to buy Dominion Energy for about $67 billion, creating the largest regulated electric utility in the world. Virginia's State Corporation Commission is the regulatory body tasked with reviewing the application, and the SCC's commissioners will ultimately decide whether to approve, deny or impose new conditions on any potential merger.

As a Virginian, I am deeply skeptical about whether selling our primary state-regulated utility to an out-of-state company is good for the commonwealth. I have serious questions about what this deal would mean for us. And as governor, I intend to get answers and be a voice for Virginians in the process. That is why I will be taking the legal step of "intervening" in this proposed merger, which means that as governor, I will formally request to be a party to the case.

I know this action is unprecedented by a Virginia governor -- but so, too, is the size of this proposed merger and its potential impact on the commonwealth. Virginians deserve to know that their leaders are laser-focused on ensuring that their needs are part of the SCC review. "If two large corporations stand to benefit financially from this merger, so, too, should the Virginians who pay the bills," said Spanberger. "That is why any potential deal must deliver a more affordable energy bill with sustained, long-term energy cost savings."

By formally intervening in the merger review, Spanberger's administration would gain legal standing to participate directly in the case, request detailed information, raise concerns, and advocate for conditions that benefit people in the state. She says the goal is to push for lower long-term energy costs, protect utility jobs, and ensure any new owner continues investing in reliable, affordable and cleaner power.

Does it matter?

[Locke2005]

Electric utilities are the definition of a natural monopoly. As such, they need to be regulated so tightly that they can't even fart without government permission. Most utilites can't increase prices without begging/bribing the government for permission. I guess that's the real problem: bigger monopolies can afford bigger bribes.

Re:Does it matter?

[Aighearach]

Where I live (in the US) most of the utilities are government entities. Very similar in power level to a city. Run by Boards elected by the voters in their service area.

It works really well. Rates lower than average, uptime above average, lower percent of fossil fuels, higher rate of investment in utility-owned green energy, etc.

My city has really excellent uptime, and outages get fixed really fast. And slightly higher rates than the city next door. That city has good uptime, outages get fixed in an average time, and has lower rates. All consistent with the expected expectations of the communities based on either political or socioeconomic differences.

And all overseen by the state Public Utility Commission, which effectively prevents graft or other financial corruption. They can raise rates whenever they want, but the PUC will check that the money went where they said, and they'll face the voters if they do anything stupid.

If you attempt a bribe in this context, where everybody involved in a public servant, you can expect a visit from the State Police.

It's much more robust than trying to squeeze blood from a rock with regulation. If a private utility wants to charge more rates and the regulator says no, they can just waste a bunch of money (on paper) and prove they have to. The regulator can't really win in practice.

Re:Does it matter?

[abulafia]

Yep. Municipal power is a natural thing to do - it is a situation where the locals are about as close to fully aligned with one another as they get - everyone wants reliable, cheap power and responsive service when you need it. So you make a captive company with a charter that keeps it aligned with its customers instead of Wall St. You don't take silly risks because you're not chasing infinite growth, customers gets decent rates, the area gets some decent local jobs out of it. Everyone except the predators are happy. If only other all local problems had such great solutions.

But, ohhh, booga-booga, that's communism. (Please just ignore Trump seizing the means of production [forbes.com].)

Re:

[Locke2005]

I'm on Coos-Curry Electric Cooperative, which also provides my internet connection. In theory, it's controlled by the customers, just like a community credit union. In practice... well, I suspect they are too small to be worth a huge bribe. That being said, I'm pretty sure the billionaire building a $15 million megamansion down the beach from me can afford to bribe all the public officials he wants. I can't really complain; he's taken over maintenance of our beach access and private road, and he has the res

Re:

[martin-boundary]

When an out of state company makes decisions inside a state, the state's power to force outcomes becomes limited. The out of state company can always say "take it or leave it" and threaten to exit the market.

So it's always better to keep companies that do business on the inside of a state, then the state can properly punish failures to uphold required standards.And if the company wants to shut down or exit, the state can attempt to take over the assets and force desired outcomes in various ways.

Re:

[sabbede]

No, not when it's a regulated utility. What they can do and what rates they can set are already being decided by the State, so it doesn't matter where the utility is headquartered. Or, more succinctly, what you're talking about is already in place.

And moreover, Dominion is already an interstate power company. They've been my gas company (as owners of SCANA). They provide gas and power in Georgia, Idaho, North Carolina, Ohio, Pennsylvania, South Carolina, Utah, Virginia, West Virginia, and Wyoming.

Re:

[zlives]

please explain your reluctance to this statement
"If two large corporations stand to benefit financially from this merger, so, too, should the Virginians who pay the bills," said Spanberger. "That is why any potential deal must deliver a more affordable energy bill with sustained, long-term energy cost savings."

The NETWORK is a natural monopoly

[Bruce66423]

There's no need for the suppliers to be a monopoly. Different companies can feed electricity into the grid.

Re:

[Locke2005]

The grid itself is a natural monopoly, and is expensive to maintain. Agreed that once you get the load balancing down, multiple power generators should function like a frictionless economy, always buying from the cheapest source and adjusting every millisecond.

Re:

[zlives]

nothing Enron can happen, it can only good happen.

Re:

[Locke2005]

REGULATED capitalism is good. Unregulated is not. Personallly, I feel our government is doing far too little antitrust regulation right now, hence the media monopolies. Hoping the Dems will break them up when they regain power.

Re:

[zlives]

I no longer have much faith in the DEMs corporate leash holders.

Re:

[sabbede]

That's what doesn't make much sense to me. It is a regulated utility and will remain one. Since the State is setting the price, what is she worried about?

Well, from reading the op-ed, I'm guessing "my name isn't involved", is the problem.
Or, under your more cynical analysis, "I'm not currently on the 'to be bribed' list and don't want to miss out."

Re:NextEra energy

[ArchieBunker]

Mega corp that tried to make it illegal to install solar panels on your home, in Florida. Where the state motto is The Sunshine State.

Re:

[zlives]

oh the irony, nice

As a Virginian ...

[fahrbot-bot]

I'm not keen on tying ourselves with Florida in any way.

(I say this after having spent my freshman year at USF in Tampa way back.)

new idiots lead, old history repeats

[NotEmmanuelGoldstein]

Has everyone forgotten that California sold its power plants and suffered electricity black-outs as a direct result: The now-private power plants 'shipped' California's electricity to other states where the profits were higher.

Re:

[Dan East]

Virginia does not own Dominion Energy. They just regulate it (set rates, etc). They would regulate the resulting corporate entity after a merger, whatever that is, just the same as they do now, as is their right to do so as a state.

I suspect this will get shot down, as Virginia does not have the right to control this (it is interstate / federal level for one thing).

Re:

[sabbede]

States have the authority to regulate utilities. Spamberger may get shot down for trying to involve herself in the SCC's decision-making, as that is a body whose members are appointed by the Legislature and don't appear to be under her authority.

Good

[ArchieBunker]

My electric company is owned by conglomerates in Australia and Singapore. You think they give a fuck how the infrastructure in the area is doing?

Wait, Dominion's going to Merge?

[outsider007]

Someone better tell Odo.

Re:

[fjo3]

Someone better tell Odo.

Laws change depending on who's making them. Cardassians one day, Federation the next... but justice is justice.

Re: Wait, Dominion's going to Merge?

[LindleyF]

Les poissons, les poissons. How I love les poissons!

Re:

[pezpunk]

ACAB includes shapeshifting constables.

Impose STRICT conditions

[Bruce66423]

No rate rises for 15 years
Reliability must remain within 1% of present rates - large fines - 1% of turnover if they aren't.

If the takeover company agrees to these terms - which should only be changeable by a law passed in the Virginia legislature before AND after an election - then agree to accept the takeover ;)

Re:

[sarren1901]

No rate rises for 15 years? That's insanity. What if I tell the state I'm just going to pay the same property taxes for the next 15 years? Even if all costs some how magically stayed static, inflation in 15 years with very likely eat away 50% of their income.

None of this will matter though. This is Interstate economics, which puts this at the federal level and not the state level.

I guess we'll just hear how this pans out when the time comes. Or we may not.

Re:

[zlives]

"“We are bringing NextEra Energy and Dominion Energy together because scale matters more than ever— not for the sake of size, but because scale translates into capital and operating efficiencies,”"
all the state is asking is to pass some of those capital and operating efficiencies to the consumers.
and no i think in case of a state public utility, the state may have something to say.

Enron 2.0

[sinkskinkshrieks]

Too big to jail, fail, and will continue passing on even more bullshit fees, worse service, and rate increases to subsidize welfare for rich people's data centers.

Re:

[sabbede]

How are they going to do that when they are a heavily regulated utility?

Re:

[zlives]

by bribing the SCC

Dominion isn't the only power company in VA

[Ritz_Just_Ritz]

There are other energy companies in Virginia with Dominion being the largest of the bunch. Dominion itself already operates in multiple other states including North and South Carolina and produces a substantial amount of "carbon free" energy in New England.

I don't think Spamburgler has any real standing to meddle in the deal and is looking for a way to relevance after getting politically shellacked in the courts repeatedly since taking office.