803 S.E.2d 758
Va.2017Background
- In 2015 the General Assembly enacted Code § 56-585.1:1, temporarily suspending the State Corporation Commission’s (SCC) biennial base-rate reviews for Appalachian Power Company (APCO) and Dominion Virginia Power for multi-year "Transitional Rate Periods," effectively freezing base rates for those periods.
- Old Dominion Committee for Fair Utility Rates (large industrial customers), VML/VACO APCO Steering Committee (local governments), and a residential customer (Torrent) challenged the statute, claiming it violated Article IX, § 2 of the Virginia Constitution by stripping the SCC of its constitutional duty and power to set rates.
- The Attorney General, APCO, Dominion, and the SCC (despite policy opposition to the statute) defended the statute’s constitutionality, citing Article IX, § 2’s "subject to such criteria and other requirements as may be prescribed by law" language and prior precedent.
- The SCC rejected the challengers’ constitutional argument and dismissed the petition; a commissioner dissented on policy grounds. The SCC relied on strong presumptions favoring legislative acts and precedent construing Article IX, § 2 as subordinating SCC ratemaking authority to legislative prescription.
- The Virginia Supreme Court reviewed the constitutional question de novo, applying the heavy presumption in favor of statutes and existing case law interpreting Article IX, § 2.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Code § 56-585.1:1 violates Article IX, § 2 by suspending SCC’s biennial rate reviews (thus stripping SCC of constitutional rate-setting power) | Old Dominion: Article IX, § 2 grants the SCC exclusive constitutional power to set rates; the statute unlawfully removes that power and leaves SCC powerless to protect customers | State/Respondents: Article IX, § 2 expressly makes SCC authority "subject to" criteria and requirements prescribed by law; the General Assembly may lawfully limit/suspend SCC reviews; precedent so holds | The Court held the statute is constitutional: Article IX, § 2 allows the General Assembly to prescribe criteria/requirements that can include suspending biennial reviews; challengers failed to overcome the strong presumption of constitutionality |
Key Cases Cited
- Commonwealth v. Virginia Elec. & Power Co., 214 Va. 457, 201 S.E.2d 771 (1974) (interpreting Article IX, § 2’s "subject to" language as subordinating SCC rate authority to General Assembly prescription)
- Appalachian Power Co. v. State Corp. Comm'n, 284 Va. 695, 733 S.E.2d 250 (2012) (describes statutory biennial review regime and limits on SCC rate reductions)
- Elizabeth River Crossings OpCo, LLC v. Meeks, 286 Va. 286, 749 S.E.2d 176 (2013) (reiterates presumption of constitutionality and that SCC jurisdiction must be found in constitution or statute)
- Potomac Edison Co. v. State Corp. Comm'n, 276 Va. 577, 667 S.E.2d 772 (2008) (confirms that SCC exercises legislative-like ratemaking authority under statutes and precedents considering limits on SCC discretion)
- Harrison v. Day, 200 Va. 764, 107 S.E.2d 594 (1959) (establishes the heavy presumption favoring the constitutionality of legislative enactments)