Day 12 of the PSC Hearing (11-16-18)

Day 12 of the PSC Hearing (11-16-18)

Day 12 of the PSC hearing continued featuring Dominion CEO Tom Farrell.

In response to questions by Mr. Knapp, the following answers were given by Mr. Farrell:

  • His staff did not obtain for him the total amount of advertising dollars Dominion has spent in SC on TV, radio and newspapers in 2018 even though Mr. Knapp had requested the information the day before from Dominion’s CFO. Mr. Farrell said that he did not have an estimate of how much the company spent. However earlier testimony indicated that Dominion had spent $2.5 million on advertising just in January and February of this year.
  • He did not know exactly how Dominion came up with the $1000 figure was arrived at as the check the average residential customer would get under its Plan A.
  • He claimed that the $1.3 billion SCE&G would use to give checks to ratepayers under Plan A would not have to go into the ratebase and be paid back as a consumer loan. This is contradiction to previous testimony and filings by SCE&G.
  • He admitted that not all customers would get a $1000 check.
  • He admitted that if Dominion’s Plan A were approved by the PSC, there would be a 7-8% rate hike on customers from current rates.
  • He also agreed that a much smaller rate hike would be necessary if the PSC approved Dominion’s Plan B.

Mr. Knapp also pursued the issue of merger conditions made by Dominion being flexible.

Mr. Farrell admitted that the changes to the Base Load Review Act passed by the legislature have had a serious impact on SCE&G. Yet, despite Dominion insisting that there be no changes to the BLRA as one condition for the merger, the company still wants the merger.

Mr. Farrell also admitted that when Dominion laid out its Customer Benefit Plan (Plan A), he said it was the best and final offer. Yet, Dominion made concessions and rolled out Plan B (no cash rebate) which he said provided similar customer benefits but in a different way.

Mr. Farrell also agreed that Dominion could even make additional rate reductions in Plan B and still do the merger.

Mr. Knapp expressed concern about the integrity of the legislative process, especially undue influence by legislators on the quasi-judicial Public Service Commission. He asked Mr. Farrell if Dominion recruited any of the intervening parties to intervene in this hearing?”  Mr. Farrell said that he has no idea (an interesting response in that it is not a denial that Dominion sought a friendly party to intervene to assist them in securing a favorable PSC order).

As a follow up question Mr. Knapp asked if Dominion had made or promised to make financial contributions to any intervening party or any cause associated with any of the intervening parties. Mr. Farrell said not to his knowledge.

Mr. Farrell agreed that legislators should not have undue influence on the regulatory process if they are not a party to a PSC hearing. He said that he did not have any recommendations to the legislature on this issue.

In response to questions from another intervening party, Mr. Farrell said that he couldn’t speak to the corporate culture of SCANA. However, earlier this year he told a House committee that Dominion had the same corporate culture as SCANA.

A final witness was Allen Rooks, Manager of Electric Pricing and Rate Administration at SCANA Services. Regarding Dominion’s Plan A proposal, Mr. Rooks said that SCE&G is agreeable to changing the base year for determining what SCE&G customers were eligible for a rate credit and for how much.  The original proposal was to use 2016 customer electricity usage, but the new proposal was to use the last the most recent 12 months of energy use for active customers.

Mr. Knapp asked if this methodology would result in customers who just became SCE&G customer recently would get the same check as a customer with a similar usage during the 12-month baseline even though they had been paying higher rates since 2009.  Mr. Rooks said that those two customers would get the same rate credit.

Mr. Rooks also said that SCE&G had not run the numbers on this new methodology to see if the $1000 average rate credit would still be the result. However, he said he expected the same results.

Day 13 will start on Monday.

Frank Knapp