2011 Annual Report - Virginia Attorney General

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2011 REPORT OF THE ATTORNEY GENERAL
but noted “compelling criticisms and concerns from Consumer Counsel,” and the
SCC imposed a number of conditions on its approval in response to issues raised by
the Section and Commission Staff.
At the federal level, the Section prevailed in its petition for review against the
U.S. Department of Energy (DOE) over DOE’s designation of National Interest
Electric Transmission Corridors based on a transmission Congestion Study. Virginia’s
suit in the U.S. Court of Appeals for the Fourth Circuit was consolidated with others
and heard in the Ninth Circuit. The Ninth Circuit, in California Wilderness Coalition
v. DOE, adopted Virginia's argument that DOE failed in its obligation to properly
consult with the affected states in undertaking the congestion study.
The Section’s activities in natural gas matters included a Virginia Natural Gas
base rate case and a Washington Gas Light case for approval of a new rate rider
authorized by 2010 legislation for infrastructure replacement programs. In the
Virginia Natural Gas rate case, the company sought an increase of $25.1 million in
annual revenues and an authorized ROE of 10.95%. The Section helped negotiate a
settlement among the parties that reduced the requested annual rate increase to $11.3
million, based on a 10% ROE. In the Washington Gas case, the Section’s advocacy
helped to establish favorable precedent for customers when the SCC agreed that costs
eliminated from plant retirements must be netted against the cost of new plant
investment recovered in the rider surcharge to avoid the possibility of double
recovery.
In telecommunications matters, the Section intervened in an SCC show cause
proceeding instituted to investigate Verizon landline service quality following
complaints from customers and government officials regarding the adequacy of
service. We identified issues concerning promised response times for the restoration
of service. The SCC adopted various measures and reporting requirements to address
the issues. In another matter with Verizon, the Section highlighted the statutory
requirement for safeguards to protect customers before declaring certain telephone
services to be competitive and deregulating the rates for those services. SCC approval
of the application was granted subject to the continuing safeguards.
The Section also concluded a qui tam case brought in 2005 against Avaya,
Lucent, and AT&T where defendants leased, rented, and made post-warranty
maintenance charges for telephone communications systems and services since 1994
to governmental customers who no longer had the telephone systems or to whom the
defendants no longer provided maintenance services. Under a settlement entered in
February 2011 Virginia received a net settlement amount of $169,580 to be
distributed to various localities and entities.
The Section also participated in the annual workers’ compensation rate
proceeding before the SCC to establish the “loss cost” component of rates for the
Voluntary Market, and the “assigned risk” rates for the Assigned Risk Market. Our
work in this matter also extends to having an actuarial consultant participate in a work
group among the industry, Bureau of Insurance actuarial consultants, and other
interested stakeholders to identify and address actuarial issues in between the rate
cases each year.