RICHMOND — David Suetterlein and his boss, state Sen. Ralph Smith, rarely disagreed.
But when utility regulation became a hot-button issue in 2015, during Smith’s final year in office, the two found themselves at odds.
Smith, a former Roanoke mayor and two-term state senator, voted to freeze utility rates — a move that allowed Dominion Energy and Appalachian Power Co. to reap millions in overearnings.
Smith, 75, and retired, has come to regret his decision. But Suetterlein — who served as Smith’s legislative director for eight years and became his successor — opposed the rate freeze all along.
Now in his first term in the state Senate, Suetterlein has been a maverick on the Republican side, fighting to repeal the rate freeze his mentor and former boss counts as one of the biggest mistakes of his political career.
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The 2015 rate freeze legislation locked in base rates for most Virginia energy consumers and halted the State Corporation Commission’s (SCC) ability to issue customer refunds.
Sen. Frank Wagner, R-Virginia Beach, first introduced the bill as a response to former President Barack Obama’s Clean Power Plan, which the commission predicted would “substantially” increase Virginia electric rates.
“Policy makers froze rates then due largely to a report issued by the SCC in the fall of 2014,” said Dominion spokesman David Botkins. “Policy makers were protecting consumers with that legislation at the time.”
But when President Donald Trump signaled plans to scrap the Obama initiative upon entering office, rate freeze opponents had the catalyst they needed to fight the bill.
Sen. Chap Petersen, D-Fairfax, a fiery Democrat with an affinity for bow ties, was one of six senators to oppose the initial rate freeze legislation.
In 2017, Petersen introduced legislation to repeal the rate freeze, despite acting alone and in opposition to a deep contingent of Dominion lobbyists and lawmakers friendly to the electric monopoly’s interests.
Petersen discovered an unexpected ally from across the aisle. Suetterlein, the youngest member of the Virginia Senate and not even halfway through his first term, said he came out against the rate freeze because electric customers were being overcharged.
“I had no support, period,” Petersen said. “When you speak alone on an issue and no one is joining you, it kind of causes you to question yourself, and so when Dave joined me and became my right-hand man, or maybe I was his right-hand man … it sort of bolstered me.”
From different parts of Virginia, opposing political parties and different generations, Sutterlein and Petersen made an odd pair. Petersen donated to Suetterlein’s Democratic opponent the year before — a $1,500 contribution he now jokes is payback for the time Suetterlein volunteered for one of Petersen’s Republican opponents.
Suetterlein co-sponsored Petersen’s rate freeze repeal, and the senators began to work in tandem.
“The bottom line is I think we trust each other’s opinions,” Petersen said. “Certainly we’re not going to agree on every issue, but I feel like on this issue it’s been a great collaboration, it’s made a difference.”
Ultimately, the lawmakers made no tangible progress on the issue during the 2017 General Assembly session, but they were not deterred.
Keep your money
Suetterlein, 33, has found his voice in the General Assembly as a ratepayer advocate.
He is the only member of the Senate who has never accepted campaign contributions from Dominion or Appalachian Power.
Dominion is the state’s largest corporate political donor and one of the most powerful lobbying groups in the General Assembly.
After the rate freeze, Suetterlein said he could not, in good conscience, take money from the energy companies.
“I did not feel right taking money from a utility when I knew Virginians were paying excessively high rates,” he said.
Refusing Dominion donations became a trend in the 2017 House of Delegates races. Last year, 13 lawmakers who shunned money from the state’s two largest utilities won House of Delegates seats.
Incumbent Del. Sam Rasoul, D-Roanoke, has also taken such a pledge and extended by refusing campaign donations from all special interest political action committees and lobbyists. The voters demanded drastic changes in 2017, he said.
“It is important for all of our elected leaders to be able to read the tea leaves and understand that the desires of the people are changing,” he said. “We all must evolve.”
New era in Richmond
Shunning campaign donations from utility companies, along with the profusion of new millennial lawmakers elected to the General Assembly and the pushback to Dominion-backed utility overhaul legislation, signals how the new General Assembly will work , Rasoul predicted .
Among the more vocal opponents of the utility rate freeze in the House, Rasoul called the 2015 legislation a “corrupt law.”
Even proponents who scrapped bills to repeal the 2015 rate freeze agree changes are necessary. A contingent of utility-friendly lawmakers in the House and Senate introduced alternate legislation to restore SCC reviews and specify what the electric companies may do with overearnings.
“To say that somehow that was a corrupt action by this House, I take offense to that because it was not corrupt,” said Del. Terry Kilgore, R-Scott, who is a patron of the alternate legislation. “We were dealt a hand of cards, and we were responding according to what was going on in the market at the time.”
While on different ends of the political spectrum, Rasoul said he and Suetterlein align on the rate freeze issue because they’re both millennials aiming for a more responsive and effective government.
“There is an appetite and a critical mass of people who just want to see things done differently,” he said. “This is not a Republican or Democrat issue. It’s about doing what’s right for Virginians.”
Rasoul joined the General Assembly in 2014 and quickly learned about the legislature’s relationship with the state’s dominant utility companies. Lawmakers passed legislation that allowed Dominion to fund nuclear energy research with its profits, a move that could have allowed the company to avoid giving customer rebates or rate reductions in some situations.
Rasoul campaigned internally against the bill to no avail. He was young, new and lacking the wherewithal to effect change.
Concerning the rate freeze legislation, Suetterlein was in a different situation because he had worked inside the Capitol for nearly a decade before being elected, Rasoul said.
“He came in knowing a lot of how all this stuff works,” Rasoul said. “It gave him a lot of institutional knowledge from day one so I think that gave him a leg up.”
Ralph Smith’s regrets
Suetterlein and Smith were deeply divided over the 2015 rate freeze.
Smith was concerned about the Obama administration’s clean energy plans. But Suetterlein was convinced electric rates were about to go down, which would mean freezing base rates could hurt Virginia’s electric customers.
Smith listened to Suetterlein, but ultimately voted against his aide’s wishes. After all, Suetterlein was there to advise, not make decisions, Smith said.
Nowadays, their roles are reversed. Smith gives Suetterlein advice that he doesn’t expect his successor to follow. But Suetterlein doesn’t need advice when it comes to attempting to repeal the rate freeze, Smith said.
“If I were still there, I’d be voting with Dave,” he said.
Smith stepped down in 2015 and deftly handed the reins to his longtime aide, who easily won his first election. After years of having a full-time political job, Suetterlein became a part-time lawmaker and full-time Realtor.
Smith has often expressed regret for his rate freeze legislation vote. The former state senator says he put too much faith in a lobbyist and was misled.
Dominion studied the issue far more than any lawmaker, and they could forecast the upcoming environment for utility rates, he said. For lawmakers, it was just another vote. For the utilities, hundreds of millions of dollars were on the line, Smith said.
“Nothing, not a single vote of my many votes weighs on my mind as this one does,” he said.
Dominion wins, again
A sweeping overhaul of state utility regulation is now headed to Gov. Ralph Northam’s desk.
The Dominion-backed legislation approved last week reinstates periodic SCC reviews of electric rates and includes investments in renewable energy, grid updates, millions in consumer credits and rate reductions.
Suetterlein didn’t support the dense, 64-page bill because he is skeptical it will lead to the refunds customers deserve.
The legislation still usurps some of the State Corporation Commission’s power by going from biennial to triennial reviews and declaring renewable energy projects and grid modernization investments in the “public interest” so they take precedence over lowering rates, Suetterlein said.
The two utilities will be able to offset their profits with spending on commission-approved projects, something that will encourage Dominion and Appalachian Power to funnel excess earnings into new initiatives instead of to their customers, he added.
“The goal should always be getting a fair deal for Virginia families and businesses,” Suetterlein said.
All Virginians should be able to get behind having lower, stable rates and cleaner energy, said Botkins, a Dominion spokesman. The company supports the final legislation that passed the General Assembly last week.
Dominion officials appreciate the chance to discuss energy policy with Virginia lawmakers and recognize people can have different points of view, Botkins said.
“This comprehensive, bipartisan energy policy legislation will set the stage for major economic development and customer benefits well into the future for Virginia,” he said.
Sen. Wagner, who has accepted $104,485 in campaign donations from Dominion, introduced the sweeping utility overhaul. Like a player in a chess match, Wagner made moves to counter Suetterlein, Rasoul and Petersen , and won.
Wagner sees the utility-supported rollback of the 2015 law as a driver of economic development. Dominion and Appalachian Power will be able to modernize infrastructure by burying transmission lines and funding renewable energy initiatives, he argues.
“We’re making the same types of investments our parents made in the 1950s on the interstate highway system,” Wagner said. “Yeah, it took a little money out of their pockets, but we’re all reaping the rewards. We’re making those very similar investments in our electric grid.”
Previously, the General Assembly directed the State Corporation Commission to keep electric bills as low as possible without regard to investments in the grid, he said. Now, lawmakers are directing the SCC, a consumer protection agency to allow utility companies to make targeted investments.
“I think Mr. Suetterlein, I’m not speaking for him, but his vision is to go back to the old way of not making of any of these investments,” Wagner said.
The Senate passed the expansive utility bill Thursday on a 27-13 vote. Seven Republicans and six Democrats opposed the measure.
Western Virginia legislators split on the vote, with Sen. John Edwards, D-Roanoke, voting in favor, and Sen. Creigh Deeds, D-Bath, and Bill Stanley, R- Franklin County, joining Suetterlein by voting no.
The legislation now heads to Gov. Northam for final approval, which seems likely.
In the end, two years of forceful opposition to the rate freeze caused lawmakers to re-examine the 2015 legislation, a move that brought the utility companies to the table, Suetterlein said. The persistent debate on one of the most substantial pieces of legislation this session spurred more critical thinking on the utility regulation, he said.
“We’ve been able to make some significant changes to the legislation and been able to, in a small way, cause people to realize this legislation is not designed to benefit the consumer,” Petersen said.