Dive Brief:

• The Virginia State Corporation Commission voted 2-1 to uphold a law passed in 2015 giving lawmakers the authority to freeze utility rates. The bill, signed by Gov.  Terry McAuliffe last year, locks in Dominion's rates for five years.
• The case could end up in front of the state Supreme Court, say observers, with challengers saying the state's laws give the SCC not just the authority to set rates, but also the "duty," which cannot be stripped away, according to Southeast Energy News. 
• While supporters of the law say Dominion's rates would be addressed at a later point, dissenting Commissioner James Dimitri called this a "fiction of a grand proportion," arguing the rate freeze would inevitably lead to higher returns for the utility. 

Dive Insight:

Southeast Energy notes a potential legal tug-of-war over this issue could change how Virginia ratepayers pay their utility bill and charges. 

Dominion pressed for the rate freeze and got it last year, arguing that it was necessary to help the utility address carbon regulations that threatened coal facilities and could spike rates. McAuliffe signed the bill, with a statement saying he “concluded that this legislation represents a net positive benefit to Virginians and to our economy.”

A group called The Old Dominion Committee for Fair Electricity Rates challenged the law before the SCC, potentially setting up a court challenge. Southeast Energy News reports the group's lawyer declined to comment on the likelihood of an appeal, but a notice of intent to bring the case would need to be filed by Aug. 1.

“If the (Supreme) Court allows this to stand, what’s to prevent the legislature from making this a 20-year suspension of rates?” Karen Torrent, an energy and environmental attorney, told the news outlet.

Commissioner James Dimitri, in a dissent to the commission's order, said lawmakers could not take away the SCC's oversight. 

"In an apparent attempt to temper in some way the ceding of the Commission's authority and responsibility, the opinion resorts to a fiction of grand proportion - that the General Assembly's prohibition is only 'postponing' the exercise of the Commission's rate-setting authority, that it is only 'temporary,'" he wrote.  

The law "permanently bars, totally prohibits, any rate review, rate change or refund of base rates for a period of years set by statute, and if customers pay excessively during that period, the excess
payments for those years must be absorbed by customers," Dimitri wrote. "Nothing is temporary, nothing is postponed, for those years."