The West Virginia energy industry is a gift that truly keeps on giving. This is just ridiculous.
In September 2020, West Virginia’s chief utility regulator told the state’s natural gas customers that she had good news: Their bills were about to drop significantly thanks to the state’s drilling boom and the declining price of wholesale gas.
“I hope that this news will brighten your day and help to keep you and your family warm throughout the upcoming heating season,” Charlotte Lane, chair of the state Public Service Commission, wrote in a column that was syndicated statewide.
For many West Virginians, it was welcome news. As the COVID-19 pandemic raged, tens of thousands of residents had lost their jobs. And even before the expensive winter months arrived, so many people were financially struggling that more than 130,000 West Virginians were eligible for pandemic-related state assistance because they had missed a utility payment.
But the price drop Lane promised turned out to be brief. In fact, by January, a majority of customers’ bills in the state had gone up. While gas prices had declined, as Lane predicted, a utility surcharge on every monthly bill had increased, wiping out the savings.
The fee was the direct result of legislation that Lane had pressed for five years earlier as a lobbyist for the natural gas industry — something she did not mention in her column.
In 2015, Lane — working on behalf of the West Virginia Oil and Natural Gas Association, an industry trade group — pitched the surcharge as necessary to pay for the repair of thousands of miles of decaying and damaged pipelines, which represented a growing threat to the environment and nearby residents. Since then, the law, known as Senate Bill 390, has enabled an infrastructure bonanza for utility companies, with few consumer protections.
The new measure allowed industry to charge customers up front for planned work, and overwhelmed regulators tasked with keeping utility spending in check. Through that authorization, the industry has spent at least $240 million on pipeline projects since 2016. Total capital spending by the state’s two largest natural gas utilities, Mountaineer and Dominion Energy, more than doubled in the first three years of the program’s existence.
And, Lane’s predictions notwithstanding, consumers are paying more and more for companies’ infrastructure efforts. Dominion customers, for instance, have seen the costs from the infrastructure fee nearly double in the last two years alone, even as their overall average bill has dropped. The surcharge now amounts to nearly $100 a year for a typical customer, according to an analysis by Mountain State Spotlight and ProPublica. (The calculation was confirmed by the PSC.) And the fee is poised to rise even higher. According to the two companies’ projections, they will spend at least an additional $500 million by 2025 — which will be passed on to ratepayers.
Ah, the ways of the New Gilded Age.