What Dominion-NextEra merger could mean for Richmond bills

State lawmakers and consumer advocates are questioning how beneficial the proposed Dominion Energy and NextEra Energy merger will actually be for Virginians' wallets.

Why it matters: The deal comes with billions of dollars in credits for Dominion customers, so it's certain to affect Richmonders' power bills, but it's unclear by how much and for how long.

Driving the news: Last week, state lawmakers questioned Dominion leadership during an Energy Commission of Virginia meeting, honing in on the $2.25 billion in electric bill credits both energy giants are promising for Dominion users if the merger is approved.

Dominion's Virginia customers would see $1.8 billion of those credits over two years under the proposed deal.

That would work out to a rebate of "roughly $10 a month for a residential customer" for 24 months, Dominion Energy Virginia president Ed Baine told the commission, calling it "the largest customer credit that's been proposed" in his 30 years with the company.

Yes, but: While Dominion's Virginia customers would see that targeted bill relief, there's no indication that ratepayers would be protected from future bill hikes.

Plus, the state regulatory commission ultimately decides the final credit amount, a company spokesperson told Axios last month.

What they're saying: "The intent was to provide meaningful credits in the short term" to help with affordability, Baine told the commission when questioned by members about long-term savings for ratepayers.

Long-term savings could come through "efficiencies" created once the companies merge and passed onto Virginians through Dominion's biennial rate review, he added.

Baine didn't quantify how much or what that could look like.

But a merged company would be able to buy equipment, like poles and wires, plus borrow money more cheaply, and customers would ultimately see those long-term savings in their bills, Dominion officials tell Axios.

Threat level: Critics of the deal say the credits are meant to buy political capital and ensure the merger's approval, not help Virginians with energy costs, the Virginia Center for Investigative Journalism reports.

Those include Clean Virginia, a clean energy advocacy group, and consumer protection organization Virginia Poverty Law Center.

They point to NextEra subsidiary Florida Power & Light's latest rate increase — $7 billion over four years — which went into effect this year and was the largest in the company's history.

The merger would "create the country's largest regulated electric utility. And the risks to Virginia ratepayers are equally large," Clean Virginia's executive director Brennan Gilmore told the commission last week.

Gilmore urged lawmakers and state regulators to carefully scrutinize the merger and the effect it could have on Virginians' bills.

What's next: Baine said Dominion plans to file its merger application with the state SCC in the third quarter of this year, which will begin the regulator's formal review process.

The SCC could require additional consumer protections to be added to the deal as part of their review, officials told lawmakers last week.