EMP S3E5: Clean Virginia's Brennan Gilmore discusses recently passed legislation ending Dominion Virginia Power's decade-long reign as an unregulated monopoly

More than ten years ago, Dominion Energy convinced Virginia lawmakers to clip the wings of the state's utility regulator, the State Corporation Commission. After a decade in which Virginia Power overcollected on its rates as an unregulated monopoly, the Legislature in Richmond had finally had enough and passed legislation restoring the SCC's utility ratemaking authority. 

In this episode, Brennan Gilmore, executive director of the advocacy group Clean Virginia, discusses this lost decade when Dominion obtained virtually everything it wanted in Richmond and overcollected in rates nearly $2 billion, and details the efforts of his group and a vast coalition of other interests in working to successfully pass  legislation restoring the SCC's authority to oversee Virginia Power's rates in the public interest.

Gilmore, in a statement heralding passage of the legislative package, proclaimed: "For far too long Dominion Energy has wielded its political influence and contributions to write the rules of its own regulation. This year's legislative session has shown definitely that this era of self-regulation has come to an end."

"We've been fighting for this and we've been fighting to minimize Dominion’s political influence, and have been pushing back at them on the electoral playing field where the utility, I think, plays an outsized and inappropriate role, in hopes that we could get to a place where we would have good policy that protected consumers in Virginia," Gilmore tells EMP. "I've worked on this every day for the last four to five years. I didn't think it was going to happen this soon."

Gilmore gives credit for the outcome to involvement by Gov. Glenn Youngkin, who took an active role in the negotiations that produced the compromise legislative package, calling the Republican the first governor in years – whether Republican or Democrat – who has not been "asleep at the wheel" while Dominion obtained a succession of bills benefiting the utility's shareholders at the expense of the utility's electricity consumers.

But he also gives credit to the changing face of the Virginia Legislature, which has seen an upswell in elected officials who disavow taking campaign contributions from utilities. Clean Virginia provided an important campaign finance alternative for politicians seeking office in Richmond. But Gilmore notes that his advocacy group was part of a huge coalition advocating for reform, including the Virginia Manufacturers Association, Google and Amazon, the Sierra Club and others. "It was basically any institution or organization or individual who pays an electric bill in the state was against that Dominion legislation," he says.

Clean Virginia's efforts to restore the public interest in utility oversight doesn't stop with this initial victory, Gilmore says, noting the face of the Legislature is changing in Richmond, with redistricting prompting retirement of Dominion "stalwart allies" amid a dramatic upsurge in candidates who refuse to accept contributions from utilities. This makes him optimistic that future legislative triumphs will be in store for the Commonwealth's captive ratepayers. But until the day there is an "equitable campaign finance system," Gilmore says, Clean Virginia will continue to "fight fire with fire ... and put money on the table so that utilities aren't the only option to get into office."

Transcript

S3E5: Brennan Gilmore, Executive Director, Clean Virginia
(transcript edited for clarity)

EMP: Welcome to the energy markets Podcast. I'm Bryan Lee, and our guest today is Brennan Gilmore, Executive Director of Clean Virginia, an advocacy group founded by Michael Bills, CIO with the venture capital firm Blue Stem Management. Brennan is here to walk us through the recent agreement on legislation in Richmond that would restore the State Corporation Commission's authority to set and oversee utility rates. Brennan, thanks so much for taking the time to be with us today.

BG: It's a pleasure to be here.

EMP: So, before we talk about what's in the compromise legislative package, which I understand your group supports . . .

BG: Yes.

EMP:  . . . let's talk about how we got here. I remember about a decade or so ago, Virginia lawmakers agreed to Dominion Energy-sponsored legislation that largely stripped the SCC of its ratemaking authority. This allowed Dominion Virginia Power to overcollect on rates, while hamstringing the SCC’s ability to order the utility to return those excess collections to ratepayers, who are known in other industries as customers. So how did Virginia Power become an unregulated monopoly?

BG: It's a great question and the historical roots, of course, run deep – it would probably be more than a century ago. But I think we can pick up the story with what happened in Virginia in 2007. That's when Virginia ended a period of experimentation with deregulation. So we had had a very limited competition market, and in 2007, Dominion Energy, which had gone through quite a dramatic board reshuffling in the previous decade, said, we're going to reregulate. Dominion’s monopoly will again be the law of the land. And in doing so they passed what is now known as the Reregulation Act of 2007. That was the first time in the last 20 years where Dominion started what was a gradual process, but quite a dramatic one, of throwing off the bounds of SCC regulation. So in 2007, the process began and then every two or three years thereafter, there was a huge sweeping package of Dominion-sponsored regulatory reform that further weakened the SCC’s ability to do its job. And each of those subsequent legislative packages, there followed a period of, in many cases, hundreds of millions of dollars in what most people call overearnings, but what we call overcharges. So Dominion would every two or three years over the last decade come up with a new excuse as to why customers shouldn't be able to get that money back and why the SCC shouldn't be able to lower their rates after they had overcharged by hundreds of millions of dollars a year. And the excuses varied. At first there was the North Anna nuclear plant write off, and then later we had – well, but even before that there was a stormwater write off. And then we had what we call the rate freeze in 2015, where Dominion came to the Legislature and breathlessly said that the Obama Clean Power Plan was going to screw up their rates, and they needed to lock in the rates and not change them. Well, you know what? Trump got elected. The Clean Power Plan never happened, but guess what? The rates didn't go back. The freeze remained, and that helped them bury those overcharges. Then in 2018, we had the Grid Transformation Act, which invented a new Dominion mechanism called a customer credit reinvestment offset. They pay their McGuireWoods lobbyists a lot of money to come up with those kinds of names. And this was another tactic for them to bury hundreds of millions of dollars of overcharges. So when they were going in for rate cases during this period, the SCC would say, okay, you guys overcharged for $100 million, let's lower the rate. Never happened. The base rate hasn't been touched or really examined in decades in Virginia, and during the same period Dominion started introducing one after another rate adjustment clause for various capital investments that the ratepayers had to pay the bills on. And so we had this just incredibly utility-friendly code now, a Byzantine code, at the end of this period. So that was what has happened over the past 15-20 years that led us up to the dramatic breakthrough in terms of consumer protection that we had last weekend with the passage of two bills that put us on a much better track going forward.

EMP: Yeah, well, let's talk about that. But first, I would like to note that the situation you described with Dominion having undue influence, let's say, in the state capital due to their generous political contributions is not unique to Virginia. I saw recently in a news item that Alabama hasn't had a rate case in 30 years. 

BG: I saw that as well. 

EMP: Okay, so there was a big announcement of this compromise legislation. You issued a statement, quote, “For far too long Dominion Energy has wielded its political influence and contributions to write the rules of its own regulation. This year's legislative session has shown definitely that this era of self-regulation has come to an end.” So that's close quote, but I guess this doesn't happen right away. There's a two-year phase-in that will allow Virginia Power to continue to overcollect on its rates. Why don't you walk us through that?

BG: Yeah, so what this law does – and it was a law that completely changed from the introduction back in January. This was a Dominion-written law that Governor Youngkin and a very broad-based, diverse group of ratepayer advocates worked on to get to where it wound up in the end. Let's start with where the bill started. When Dominion introduced this bill, it would have closed the very limited retail market that we have in Virginia, which is miniscule, but it would have further restricted that. It would have allowed them by manipulation of what they call their peer group, which forces the SCC to look at some cherrypicked utilities that allow them to get a higher ROE. It would have further restricted the SCC’s ability to set a proper ROE and in doing so given them a 1% bump in their ROE, the outcome of that would have been likely in the billions of dollars in the next decade, and would have also allowed them to set their own equity layer so their debt-to-equity ratio, what they can earn that ROE on, it would have allowed them to bump up the level of equity in that, making the ROE applied to a bigger piece of the pie in terms of what they're getting from ratepayers. And so it was an absolute utility giveaway bill. About halfway through the session, the governor sent his acting Secretary of Natural Resources to the House Commerce and Energy Committee. At that point the House bill changed dramatically. It stripped out almost all of those utility-friendly provisions and was a very basic bill that said that there would be, you know, a rate case every two years, but otherwise, the status quo rules would apply. So over the course of those two months, there was a lot of internal negotiations and deliberations and fights over what this bill would look like. On a parallel track, there was another bill called the Affordable Energy Act, a bipartisan bill carried by a Democratic senator in the Senate and a Republican delegate in the House. And this bill would allow the utility to set rates on a going-forward basis without the constraints. It said very clearly they get to set rates and lower rates if there have been overcharges in a just and reasonable manner. And so, there were these two pieces of legislation played off each other during this negotiations process. This all came down to the last hours of the session, which closed on – gaveled out –  Saturday. And the striking dynamic that was different from last year was that Governor Youngkin was personally involved in this on behalf of the ratepayer. And we just had not had that kind of political support coming out of the executive mansion for decades in Virginia. Democratic governors, Republican governors, all of them were, I would say, asleep at the wheel, while Dominion had written this code in a way that had really hurt ratepayers. Youngkin, I think, partly because of his experience in financial markets and in the corporate world, allowed him to (a) speak the language and (b) see the tricks. And he works for the ratepayer now and is not beholden to Dominion. In fact, Dominion had run a Dark Money campaign against him in his election. And he just simply said, this isn't going to happen. I want there to be a fair rate case on my watch. Now, Dominion has baked in so much corrupt ratemaking over the past 10-15 years that the two-year period, I think, is seen as a sort of weaning off period. You know, we've got to get through this next rate case they have organized and operationalized along the lines of these existing rules. And so they get one rate case, that has – that still has some limited SCC authority and that this new law sets a prescribed ROE and equity layer. But it's much, much less favorable to the utility. It's a 9.7% ROE, which, frankly, even if they went in for an interim rate case, they would probably get in this economic environment given benchmark interest rates being as high as they are. And so from the ratepayer side, this was a massive win. We do get, you know, we do have one rate case where the rules are somewhat constrained. But after that, starting in 2025, it is explicitly clear that we will go back to an era when the SCC could fulfill its necessary and, I would say, sacred duty to oversee a monopoly. And that just hasn't happened. And frankly, I've worked on this every day for the last four to five years. I didn't think it was going to happen this soon. And we've been fighting for this and we've been fighting to minimize Dominion’s political influence, and have been pushing back at them on the electoral playing field where the utility, I think, plays an outsized and inappropriate role in hopes that we could get to a place where we would have good policy that protected consumers in Virginia. And I am frankly ecstatic that it happened this year.

EMP: Yeah, I was going to ask you how significant you thought it was to the outcome here – the more pro-consumer outcome for a change in Richmond – that Dominion spent hundreds of thousands of dollars against Glenn Youngkin's election.

BG: Yeah, I'm sure that didn't help. I don't know. You know, we did work with the Youngkin administration this year as they did really good work on these bills, but I don't know. I don't have any behind-the-scenes information on that. But my sense is it wasn't a primary motivation, that they were just trying to do the right thing. And Youngkin came in a bit as an outsider looking into this and said, you know, how did Virginia get so screwed up? Because it is patently absurd what they've gotten away with in this state, and it took someone just, you know, essentially to say that the emperor had no clothes. That Virginia had gotten so far outside of the norm of proper ratemaking, that it, you know, and with his background, I think it's really more about his experience, again, in corporate management and in financial markets that allowed him to say this is a no-brainer. Of course we should regulate them. They’re the largest monopoly properly. Them spending money, I think, against him, again, didn't help. But I don't think that was the deciding factor. 

EMP: Yeah. I was trying to think of why the political atmosphere might have become more favorable to consumers versus Virginia Power, but we are in a rising price environment. And so politicians are hearing from their constituents about all kinds of rising costs right now and, and utility costs are chief among those, so I think maybe that set a better environment for this than others.

BG: Yeah. I think that's right. You know, we are in the highest inflationary environment in my lifetime and you just hear it every day people are having a very hard time. And Virginia has a huge what we call energy burden, the percentage of someone's household income that they pay on energy is unaffordable for a majority of Virginians. And so there are a lot of poorer Virginians who are choosing between grocery bills and electric bills, and they certainly are sharing those stories. But look, there's been a lot of, I would say, contributing factors and authors of this change. There was a wave of candidates for Virginia's General Assembly in 2017, who came in on not taking Dominion’s money. You know, Dominion was trying to run the Atlantic Coast pipeline through the state at the time and it was very much in the crosshairs of environmental advocates and others. And there was a lot of momentum on that. We started in 2018 in response in part to that momentum, seeing the opportunity to build on this movement against what we call legalized corruption of our public utilities, and have done a lot to highlight the problems here and then to fund strong candidates against Dominion. So you know, there has certainly been a Clean Virginia-Dominion battle going on for influence on these issues for the past few years. And then there have been a lot of really strong voices in our legislature on these issues for many years and they have gotten a wave of reinforcement with each successive election over the past five years. So I mentioned delegate Lee Ware, Republican from Powhatan, who has been fighting this fight for a long time – I'd say a voice in the wilderness. Democrat Senator Chap Peterson is won who has been fighting for this for a long time. They've always been on the right side of the issue. And again, they were voices crying out in the wilderness, but with each election cycle, they got more reinforcements. At the same time, you know, a lot of Dominion stalwart allies in the Legislature are now retiring, you know, Dick Saslaw, Tommy Norment, both announced their retirement just over the last week and that was one of the reasons Dominion was pushing so hard for a bill this year. They knew they were losing a lot of legislative allies. 

EMP: Yeah, that's good insight. I'm here in the Washington, D.C., media market. In the D.C. market, you’ve got Northern Virginia, where their ads were targeting. And I would see these ads and, you know, you've got to support this legislation because it's going to lower your bills. And I found that to be very disingenuous. So the ads that they were running were not to support the legislation that we're talking about today, correct?

BG: Correct. No, that was to support the legislation as it was introduced. And as I mentioned, there is a huge difference between the legislation that was passed and what Dominion was trying to get passed, even though the bill number stayed the same. And yes, I mean, their ads were absolutely disingenuous, manipulative and contained false promises. The, you know, and the fact that those ads are – if not paid for by the ratepayer at the very least subsidized by the ratepayer – as Dominion’s holding company makes 70% of its income through its regulated entity in Virginia. And so consumers should be outraged by that, that they're being lied to with their own money by their utility, which should be, at the end of the day, a technocratic organization that's focused on delivering low-cost reliable services, and not using the consumer as an ATM machine for their shareholders. And unfortunately, that's what Dominion has become. But, yes, to answer the direct question, what they were advertising was manipulative, was disingenuous, and had no bearing on the final bill. What they were doing with those amounts was essentially a shell game. You know, Dominion was saying – and the figure changed whether you were listening to Dick Saslaw talk about $17 in cost savings or seeing these ads in the Washington Post about $6 in cost savings, they kept on changing what the savings would be. What happened was, they said that they were going to roll in $350 million from a rate adjustment clause into a base rate and that this would save the customers the magic $6 to $7. Well, what they didn't advertise was, at the same time period while their lobbying team was at the General Assembly, their regulatory team was over at the SCC saying that they were going to introduce a new REC (Renewable Energy Credit) related to the Regional Greenhouse Gas Initiative. Oh, and guess how much that REC was going to be? Three hundred and forty-seven million dollars. And so any cost savings they were promising through this legislation that allowed them maybe to be factually accurate about that savings was going to be displaced by a REC. The other savings that they referred to was when they introduced later in the legislative session an aspect of the bill that would have dealt with fuel securitization. So they would have created this securitized instrument to spread out fuel costs over a longer period. Now, yes, that's going to come off your bill in the short term if it goes through, but you're still going to pay for it and you're going to pay more because you're paying the return on that instrument. So there was no actual savings in their bill. And again, it was manipulative to use that type of advertising. We pushed back on that, you know, we didn't buy TV ads, but we put full-page advertisements on behalf of the Ratepayer Coalition, which oh, by the way, it wasn't, you know, just us crazy advocacy groups. We had the Virginia Manufacturers Association and Google and Amazon, the Sierra Club – it was basically any institution or organization or individual who pays an electric bill in the state was against that Dominion legislation. And so we tried to push back on their false advertising by saying, no, you're going to lose billions of dollars, and we could see that in the impact of what their inflated ROE would have been, and we could see that with past is prologue. Because the rules that have got us up to here led to $1.9 billion and overcharges over a decade. And those rules were going to get even worse for the consumer if their bill had passed. So stopping their bill – changing it into better legislation – was a massive win for the consumer in Virginia.

EMP: Right. I think you confirmed for me my suspicion that their claim to, quote, “lowering customer bills,” close quote, was tied to the securitization issue where they will securitize all of these fuel costs over 10 years. Let's talk about one of the compromises – last-minute compromises – the removal of language that would have altered the plant closure schedule under the Virginia Clean Economy Act of 2020 that calls for decarbonization of the electric sector by midcentury. Instead, I understand it asks for an SCC report on concerns about the reliability of new generation units and retirement determinations. Flesh that out for us, won’t you?

BG: Yeah, you know that language, it started out stronger, then it just turned into a study. And there is a push, I think particularly from Republican legislators and the governor, that the language in the VCEA not constrict us to the point where we have reliability concerns on the grid. Now from a pro-clean energy organization like us and the environmentals, we don't want to see the VCEA messed with and we're not concerned about reliability. We think we have the clean energy technologies to ensure reliability and meet the goals of the VCEA. That said, the language about closures – most of the plants that were affected by that are already in the process of being closed and or have been closed. So there were a couple of coal plants that would have been affected by that and then a few biomass, I think, facilities in the short term. But those are in the economic interests of everyone involved to close, not to mention the climate interests as well. So, I think we'll still have debates on reliability as we meet the goals of the VCEA. But again, we're not concerned that Virginia will have a problem meeting both reliability, cost and emissions goals.

EMP: Well, before we move on from this, I think I should put a dollar number to just how much Dominion has been overcollecting over the last decade. I saw that it was $2 billion?

BG: Yeah, yeah, we're at $1.92 billion were the SCC stats over the last decade in terms of overcharges. And that's what we know from the SCC. Who knows what the actual figure is. We don't have great transparency into Dominion’s accounting.

EMP: I'd like to switch gears here a little bit and talk about another aspect of Dominion’s clout in the state that I've been watching for the last several years. And it involves Dominion’s efforts to blunt market entry by third-party clean energy suppliers under Virginia law. So, as I understand it, as long as Virginia Power didn't have a clean energy tariff, these third-party, nonutility suppliers could serve customers, bypassing the utility. Now, I understand, Virginia Power has a clean energy tariff, or a service offering of clean energy. Where does that leave the competitive suppliers who are challenging Dominion’s monopoly?

BG: In a very bad place. You know, simply put, Virginia has an incredibly restrictive market for community solar, for other clean energy providers, and even nonclean energy – you know, other retail [suppliers] – although the market is really demanding clean sources. Anyone trying to sell electrons onto the grid has to pass through incredibly high hurdles for entry into a very limited market space. So this is something that we will continue to have to fight Dominion with in the future, to make sure that  the commonsense sort of 21st century energy solutions that are available through clean energy technology, particularly solar and battery storage, can get on Virginia's grid and customers have a choice and that these available technologies are ready for the consumer. But, you're absolutely right, one of the major downstream consequences for Dominion’s political influence and control has been to block out these types of services.

EMP: So in terms of customer-facing generation technologies, like rooftop solar, you mentioned battery storage, these sorts of small-scale but widely distributed resources that many see as necessary for us to get to a clean energy economy, there's no other provider than Virginia Power?

BG: In many cases, yes. You know, Virginia has started a sort of individual rooftop solar market, but it when you get to the level of aggregating or get to the level of communities where you can’t put rooftop solar on but they want access to that, Dominion is creating very high hurdles to get in. So, additional costs, minimum community solar costs, interconnection standards which are almost impossibly high for solar developers to meet cost-wise. These are some of the barriers that Dominion has erected. So my hope is that in an energy space, an energy policy creation space where Dominion is no longer dictating terms, which is the you know, which we've seen for the first time around these rate reform bills, we can actually have a broad stakeholder coalition on how to meet both realistic utility concerns about how we transition to this market, but also the public interest to do so and do so very quickly. And so we've got a long way to go. You know, we had a major win on the rate front. We have not had a major win on the retail front when it comes to clean energy.

EMP: Virginia Power – Dominion – is not financially incentivized to allow these sorts of things to happen. In fact, its financial incentives are just the opposite, right?

BG: That's right. And I think performance-based regulation is something we need to take a much, much harder look at as a state. And it's something that we are, I should say, as a Commonwealth, you always get dinged for referring to Virginia as a state and not a Commonwealth. And it's something that started with this bill that just passed. There was a provision that Dominion can earn an additional 50 basis points on their return on equity if they meet certain performance goals. Now, these were about operational efficiency and reliability. But we need to look at adding some retail clean-energy performance-based measures as well to incentivize them, because otherwise, you're absolutely right. As long as the utility holds the monopoly and not a nonprofit grid manager organization, they're not going to want to want to adopt what could be very good energy technologies for the public interest.

EMP: Yeah, and innovation that you probably don't get otherwise, correct?

BG: Yeah, I mean, this is why monopolies are a bad thing. You know, at the end of the day, utilities are sort of the paragon example of how monopolies stifle innovation. This is one of the motivating factors for our organization. You know, we saw that Virginia was ranking dead last on energy efficiency. We had one-eighth of the solar panels that were up in North Carolina. And this was because the monopoly was not innovating. They weren't recognizing the existential nature of the climate threat. They weren't responding to what customers in Virginia wanted. And that was because it wasn't making them as much money.

EMP: Well, economists have recognized for, I don’t know, going on 40 years now – back to the at least the 1980s – that the economic factors within the generation market, the supply market, no longer justifies a monopoly. That we should have competition in generation – full-blown competition. We don't have that. We still have utilities with one foot in the competitive commodity sphere and another foot in the regulated sphere. And I talk to people who are trying to break into these monopoly markets and – even in states that allow retail competition nominally – they, the suppliers complain that the utility is able to use its monopoly systems, the wires, the transmission and distribution, and its ability to collect for its mistakes within its rates, as real barriers to them being able to get greater market entry. And we've heard from the antitrust regulators, the FTC and the Justice Department, since at least the ‘90s, which is where my institutional memory begins. They said that the utilities should not be allowed to have one foot in the generation market and one foot in the regulated sphere – that they should be, as many folks are calling it, they should be quarantined from the market. So anyway, that's a long-winded way of asking, do you think that your goals would be easier to meet if that were the case? If Dominion was not in the generation business?

BG: It's a very good question. And I don't know the answer to it. It's one we have looked at and we were part of a coalition about four years ago that looked at a system of monopoly quarantine and greater retail competition. It was called VERC, the Virginia Energy Reform Coalition, and it brought together groups from the right and left who were fed up with the system that Dominion had put into place. But I think that there's healthy debate on both sides of this issue. And I looked at, you know, the very long and extensive MIT Utility of the Future report, which is a great resource. It didn't come away with any one sort of definitive market design. It just said that there were a lot of different aspects and goals that need needed to be met. But is there a lot of inertia from the vertically integrated utility system having this much control? Absolutely. Do they have a leg up and can use their huge weight to block out other better technologies? Absolutely. Is the current system a good one for the consumer and for the public interest in Virginia? Absolutely not. Do we need reform? Yes, we do. What exactly does that reform look like? I'm not smart enough to dictate it. But what I do know is that we need to have a level playing field around which all the different stakeholders, including retail competition providers, including the utility, including environmental advocates, including large power consumers, including data centers, which take up 21% of the electron consumption in Virginia, and sit around and say what, you know, how do we meet the goals? How do we get everyone as far along their goals as we can? And frankly, what's the public interest above all else? Because that should be what we organize a utility around. But yes, the current system is archaic. It has to change. We have to have the ability to harness innovative technologies and if we don't, Virginia will be stuck in the last century.

EMP: You mentioned earlier the rate-setting mechanism that had been adopted that allowed Dominion to have its rates reflect this peer group of utilities, which was largely other utilities in the Southeast United States, right?

BG: Yeah, and not necessarily similar to Dominion’s actual corporate profile.

EMP: But they're similar in that they're vertically integrated monopolies that are fighting like junkyard dogs to protect that monopoly.

BG: Yeah, and who's rates of return probably don't reflect reality.

EMP: So we're talking about peers such as Duke Energy, Southern Company. So you've got these big companies like Duke and Southern as the peer group, and I bring that up because you mentioned data centers. And I noticed a while back – or I noticed belatedly – that Duke is apparently funding a Dark Money group that is running ads targeting the tech industry as a, you know, we shouldn't let the tech industry dictate the outcome here, was sort of the gist of their ads. So how much of a factor do you think it was that there's such a large data center industry in Virginia in terms of the outcome we saw? 

BG: The data center coalition was part of the group that was fighting for fair rules. So I think that was a big part of it. You know, Amazon Web Services was one of the organizations that put their logo on the full-page ad saying that the Dominion bill shouldn't go forward as it was, and certainly the Youngkin administration has been very favorable to data centers as well. So that heft did help. You know, the data centers is a very controversial issue in Virginia right now. And particularly in Northern Virginia, where there's a big impact, and their growth rate has been tremendous. Again, they're consuming 21% of electricity in Virginia right now, and we may not have – and this is in Dominion’s forecasts – we may not have the transmission infrastructure to actually get them the electricity they need. And so during peak demand times they, you know, we may see what happened in California, which was emissions rules were waived, and they relied on massive backup diesel generators to keep their operations going. And so there's, you know, there are a lot of public policy areas that need to be looked at and resolved if we continue down this path of sort of unrestrained datacenter growth. But you know, there's two sides of the coin and they don't want to be paying exorbitant prices which bake in Dominion’s corruption into their rates. And we need to make sure that their electricity needs are being met in a clean manner that doesn't increase costs elsewhere in the system.

EMP: Is it good that Virginia Power is going to be developing very expensive offshore resources as a monopoly? Should that be done competitively?

BG: You know, we don't know the answer to that question because the SCC wasn't authorized to answer it. And this is one thing that we definitely want for the second tranche, is we need an objective analysis that looks at the consumer and says, is competitive procurement of the next tranche of offshore wind better, or is a vertically integrated monopoly structure better? And again, these are questions that I don't know the answer to and I recognize that there are some cases and there are some rationales for monopolies in places where the market just won't respond to the needs and that's why they were started in the first place. You know, Dominion wasn't going to wire up, you know, rural Rockbridge County where I grew up if there wasn't an incentive. And in fact, they didn't. It was co-ops that ended up doing it. And so, you know, we need the answers to that, but I highly suspect that a more competitive market would be a good thing for the consumers. But what we want now in Virginia is for the SCC to do a very good analysis of that question. 

EMP: Well, they've got a lot to untangle. 

BG: Yeah, and it's new, you know, this is new industry. But let's get those answers up front, rather than after the ratepayer has been bilked out of another $2 billion.

EMP: I think this is an important question. You know, we're at a point here where the government is going to be doling out billions of dollars to develop the needed transmission infrastructure, and how is that going to be developed at least cost? 

BG: Yeah. 

EMP: I think this is an important question.

BG: And one of the big systemic issues that we try and address is that these questions are almost always being answered by the utility. You know, that's who our legislators and our policymakers rely on for the answers to questions about energy policy in Virginia. And that's just got to change. You're asking the fox about how to protect the henhouse. We do need objective good analysis that policymakers can rely on to answer these questions that have an impact on every single person in the Commonwealth. 

EMP: Well, it boils down to money. The politicians need the campaign contributions to get elected. And the primary campaign contributor in most state capitals is the large local utility company. 

BG: Yep.

EMP: What's the answer to that?

BG: Well, I mean, we have one model, and we're trying to prove its efficacy here. And that is, you know, we have used private capital. Our board chair founder, Michael Bills, put up his own personal money to provide a pool of funds for candidates to run for office, who, as a matter of principle, don't take money from the public utilities that they're being elected to regulate. And it's one that's been controversial. And a lot of people have said, well, your money is just the same as Dominion's. Not the case. We don't have two and a half million captive customers or any business before the General Assembly. We're trying to fight a social problem. And so, you know, we have seen our contributions actually outpace Dominion’s, and there's been a market for campaign finance from sources that don't create conflicts of interest. And when we started this organization in 2018, there were two or three legislators out of 140 who refused as a matter of principle contributions from utilities. Now there are nearly 60. And we are about to go through a generationally significant election cycle in Virginia post-redistricting where new maps have pitted incumbents against each other. We've had 10% of the body already announce that they're going to retire. There will be a sea change in the Legislature in Virginia. And a lot of the new folks, just as a matter of course say, of course, I'm not going to take money from the utilities. And so we will see that shift and we've been, you know, very focused on making that paradigm shift a reality in Virginia's political system. And I think we've had significant success to date in doing that, and at least in just raising awareness of these issues. Again, it's kind of an emperor-has-no-clothes situation. No one maybe was focused on it that much. But when you just sit up and you describe the system in Virginia and how these public utilities spend this much money in the political system and get such a massive return from the consumers because of that political influence, they want to be part of the solution. 

EMP: Well, it sounds to me like, at least in Virginia, part of the solution to the money problem is money. I mean, at least with Clean Virginia they have an alternative to the utility.

BG: That's right. We don't want to ask a candidate to unilaterally disarm. The candidate that's by nature refusing utility money is one we would want to see in office and they should have resources and so we need to make sure that they do. So, I think in an ideal world, we'd have publicly financed elections throughout the country. I think we're probably very far away from that type of very equitable campaign finance system. But in the meantime, you know, we're going to fight fire with fire, so to speak, and put money on the table so that utilities aren't the only option to get into office.

EMP: Tell me, what is the motivation for Michael Bills? Why is he doing this?

BG: Michael’s a longtime conservationist and environmentalist and he, like most of us, saw what the impact of Dominion’s political corruption was – saw it in terms of Virginia ranking dead last on energy efficiency, on the lack of a transition to a clean-energy economy in Virginia. You know, he said, look, I was born and raised in Virginia. Michael went to Hampton High School. He made a lot of money working in finance in New York, but then retired back down here and wanted to contribute back and had a perch on which to do that in a very unique way and one that I don't think we have seen. And so his motivation was trying to make Virginia a better place, simply put. And it’s a philanthropic mission that's unique and that we haven't seen before. But I think all of us at Clean Virginia joined this organization and work here every day because we have similar motivations. You know, in my case, I saw their interference in political elections when I worked on one in 2017. We looked very closely at the Atlantic Coast pipeline and saw that there was just really no rationale for this infrastructure that would have disrupted the ecology of the state and impacted consumers and said, you know, what's going on here? Why is this utility operating in this way? And the more we looked into it, the more we found a possible avenue to essentially disrupt or break up the grasp that Dominion had on energy policy in our Legislature.

EMP: Well, this has been a great discussion. I've pretty much run through my notes. Is there anything we haven't discussed that you feel we should? 

BG: I feel like we've done a pretty good tour of the horizon. 

EMP: Oh, good. I did my job then. 

BG: Yeah. 

EMP: I very much appreciate your time. Brennan Gilmore, Executive Director, Clean Virginia.

BG: Thank you for having me. It's been a pleasure.

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