Dive Brief:

• A group of large industrial customers in Virginia have indicated they will file a challenge with the state's Supreme Court, arguing that a law freezing Dominion's rates until 2020 is unconstitutional and is costing consumers an extra $1 billion.
• Virginia Gov. Terry McAuliffe signed Senate Bill 1349 last year, after Dominion warned the state could face price spikes as the utility begins complying with new federal emissions standards.
• The constitutionality question has some support, as a dissenting judge in a Dominion rate challenge late last year at the State Corporation Commission argued the law wrongly stripped regulators of their duties.

Dive Insight:

The Virginia Committee for Fair Utility Rates sent a warning shot last month, filing with the SCC to inform regulators the group would be suing in the state Supreme Court to challenge SB 1349. According to the group of large Dominion customers, the State Corporation Commission has explicit authority to set rates and the law improperly stripped regulators of that duty.

That's an opinion also held by Judge James Dimitri, who in a dissenting opinion in a case challenging Dominion's rates wrote: "The record in this case and other biennial review proceedings demonstrate that, when conventional rate standards are applied, there have been, and are projected to continue to be, excessive base rates that are being paid by Dominion customers."

According to Dimitri, the freeze could cost Dominion customers $1 billion.

Over at Power for the People VA, a blog focused on the state's energy policy, Ivy Main digs into the argument and also notes that the two other SCC judges did not take up the issue of SB 1349's constitutionality in their opinion. 

"Indeed, it appears that none of the parties in the case raised the constitutional question in the proceedings, nor did any of the judges request briefing of the issue later, as sometimes happens," Main writes.