The first recorded attempt at government regulation of the marketplace involved the price of renting oxen in Babylon. Today’s regulators have more complicated jobs. We in Virginia are getting a firsthand view of how that regulation works.
Energy-related issues are swirling over Virginia, from data centers to energy production to electricity rates to the pending merger of the state’s largest utility (Dominion Energy) with an even larger out-of-state utility (the Florida-based NextEra).
All those issues eventually converge at 1300 E. Main St. in Richmond — the headquarters of the State Corporation Commission, the body that regulates utilities in Virginia. The SCC is often in the news; it was in the news again this week when the SCC chair, Kelly Bagot, said she did not find her prior work for NextEra to be a sufficient reason to recuse herself from considering the proposed merger.
Let’s get our own disclosure out of the way here: Dominion is one of our donors but donors have no say in news decisions; see our policy. You can be a donor, too, and also have no say.
This also seems to be an opportune time to look at the SCC and some related issues with the proposed Dominion-NextEra merger. As an incentive to keep reading, I’ll provide some unrelated but potentially fun information about ox regulation in 2300 B.C.
1. The SCC is one of the smallest but most important government agencies in Virginia
The Virginia Supreme Court has seven justices. The Virginia Court of Appeals has 17 judges but is being expanded to 21, triple the size of the higher court. The Virginia Tech Board of Visitors has 14 members, the University of Virginia board 17. The Virginia Milk Commission has seven members, the Virginia Corn Board 11 members, the Virginia Sheep Industry Board 12 members.
A lot of Virginia boards are big. Not the SCC, though. The SCC has just three members. If Bagot had recused herself, then two people would have made the decision about the utility merger.
This seems a remarkably small number, but it’s standard with similar boards in other states. Exactly half of the utility-regulating commissions in other states have just three members; 23 others have five members and two have seven.
For what it’s worth, the other two states who get to weigh in on the proposed Dominion-NextEra merger have larger bodies: North Carolina has five members, South Carolina is one of the states with seven members. Whether more members produce a better decision is a matter of debate as anyone who’s ever served on a committee can attest, but this is an objective fact: Fewer people in Virginia will make the decision than in those other states. South Carolina needs four people to agree to get a majority. In North Carolina, three. In Virginia, we just need two members on the same side.
As for that ox, we’re not there yet.
2. Virginia is unusual because legislators appoint the commission members
In 38 states, members of utility-regulating commissions are appointed by the governor. In 10, they’re elected. In just two, Virginia and South Carolina, they’re appointed by the legislature. That’s in keeping with how judges in those two states are picked; the SCC members are considered judges. That may also help explain why there are just three members in Virginia; three-judge panels to hear certain types of cases is the common number for multijudge cases. For instance, election recounts are overseen by three-judge panels.
Some states — South Carolina among them — require utility-regulating commissioners to come from certain districts to guarantee geographical diversity. Virginia does not. At present, none of the three SCC judges are from the western part of the state, although some have been in the past.
Still no ox yet, though.
3. The General Assembly has the power to expand the SCC but has never used it
The state constitution says the SCC can have between three and five members, but state law has only authorized three. I’ve never heard of any push to expand the number. I’m sure Republicans would regard that as expanding the size of government, and it would be. I’m curious why Democrats have never taken advantage of that provision. The Court of Appeals, curiously, has only been expanded when Democrats controlled the legislature and could appoint additional judges. Given the primacy of energy issues these days, Democrats might like the idea of appointing two more SCC judges to further their energy agenda — but they haven’t done so. If the SCC rules on the Dominion-NextEra merger in a way that some Democrats don’t like, will we see some legislators take a look at expanding the body?
Still waiting on the ox? This is mostly a civics lesson and I need to do something to make sure some of you don’t nod off.
4. The SCC is a product of the state’s worst constitution
That’s not meant to disparage the SCC, just to put it in historical context. After the Civil War, Virginia was “reconstructed” with what passed for a remarkably progressive constitution at the time that, among other things, allowed Black men to vote. The 1880s saw a period in which Virginia could have pursued a path of biracial harmony; this was the era in which many Black legislators were elected and Black schools established, including Virginia State University. Then came the backlash. That culminated with a constitutional convention in 1902 that set about drawing up a new constitution with the express purpose of disenfranchising as many Black voters as possible. That infamous 1902 constitution wound up disenfranchising a lot of poor white voters, as well, especially in Southwest Virginia. Fearing that voters about to lose the right to vote wouldn’t approve the constitution, the convention simply declared the new constitution in force without a referendum.
None of that is related to the SCC, except it was that 1902 constitution that created the SCC. The impetus was to create an entity to regulate railroads, which were regarded by some in those days as rapacious and way too powerful even when there were lots of them. The years leading up to 1902 were marked by a series of railroad consolidations that strengthened the hold of the new companies that emerged. Fewer companies meant higher shipping rates. Staunton lawyer A. Caperton Braxton chaired the committee at the constitutional convention that was charged with devising new rules for regulating corporations. “If there be any system known to man, if there be any system which can be devised as to the inefficiency of which there is no doubt, it is the interstate commerce system of to-day and the railroad commission system of Virginia as it exists to-day,” Braxton said. He declared that “the question of the control and regulation of railroad companies and the fixing of their rates of charges is … the greatest and most important economic question before the civilized world.”
The result was the SCC.
The body has often been called “the fourth branch of Virginia government” because it defies the classic separation of powers between the legislature, the executive and the judiciary. It contains elements of all three. “A review of the Debates of the 1902 Constitutional Convention illustrates that the sole reason for the creation of the three-member commission was to protect the people of Virginia,” wrote Preston Shannon in a 1973 article for the William & Mary Law Review.
Such a body could have been created by a simple law, but Shannon said Virginia lawmakers of 1902 intentionally chose to put the SCC in the constitution for two reasons. First, this helped get around the power of railroads, who might have defeated the provision otherwise. Second, the goal was “to give the Commission all the powers of a court of record, which could be done only by constitutional provision.”
While the SCC began with a duty of regulating railroads, over the years more sectors were added — including electric utilities. Ironically, Braxton, who might be called the father of the SCC, later became a lawyer for the same railroads he wanted more strictly regulated.
Still waiting on the ox? Keep plodding along, much as oxen do.
5. Virginia once elected SCC members
The 1902 constitution gave the governor the power to appoint SCC members, subject to confirmation from the General Assembly. Then, in an uncharacteristic outburst of democracy, Virginia switched to electing SCC members in 1919. There wasn’t exactly a lot of competition: Berkeley Adams of Charlotte County and William Francis Rhea of Bristol ran unopposed for the two seats available.
When there were contested elections, they weren’t very contested. Virginia was essentially a one-party state then, and that one party was the Democratic Party — a quite conservative one. SCC elections were partisan affairs and Democrats always won easily.
Then came Harry Byrd. He promoted a reorganization of Virginia government that reduced the number of positions that voters elected statewide — no more elections for SCC, no more elections for superintendent of instruction, no more elections for state treasurer, no more elections for commissioner of agriculture. There might have been some philosophical merit to this streamlining but it also had the effect of giving Byrd, and his political organization known as the Byrd Machine, more power over state government. As part of this shift, the duty of electing SCC judges went to the legislature, where it remains today.
The commissioner of agriculture probably had some say over oxen, but I don’t yet, so just hold your, um, oxen.
6. In states that elect utility regulators, the elections are partisan and can be expensive
I realize that shouldn’t be a surprise. That’s the nature of politics these days. A Louisiana news site said the 2024 elections for district-based seats on the Public Service Commission were more expensive than legislative races. Since different states have different rules on campaign finance, it’s tricky to make exact comparisons. In Virginia, where corporate contributions are legal and there are no limits on how much a donor can give, it’s easy to imagine a hypothetical election for an SCC commissioner being on a par with other down-ballot state races, such as lieutenant governor and attorney general. In 2025, those campaigns spent $1.8 million (John Reid for lieutenant governor), $9.1 million (Ghazala Hashmi for lieutenant governor), $16.1 million (Jay Jones for lieutenant governor), $26.7 million (Jason Miyares for attorney general). The ability to set utility rates is arguably more important than the ability to preside over the state Senate so I’d guess an SCC race would cost in that range.
Would that be a good thing or a bad thing? The answer to that likely depends on how you feel about electing other types of judges — something some states do but Virginia doesn’t. The issue with Bagot and her decision not to recuse herself turns on whether she can be an objective arbiter; it seems hard to imagine how someone could be objective if they’d gotten elected on particular political platform, be it pro-Dominion or anti-Dominion, pro-renewables or anti-renewables, you name it.
All I know is if you piled all that money into a cart, it would take a lot of oxen to pull it. We’re getting there but we’re not there yet.
7. If Virginia had SCC districts, we might have commissioners who don’t live in Dominion territory
While we’re engaging in hypotheticals, we may as well go all the way. If it wanted, the General Assembly could increase the SCC membership to five. There appears to be no constitutional prohibition on requiring those members to represent specific districts. What if we divided Virginia into five SCC districts? Since we don’t know how those districts would be drawn, this is thoroughly speculative but look at the map above. You’ll see that Dominion’s service territory is remarkably scattered — it looks like a big yellow paint splatter to me. If you’re in Richmond, Northern Virginia or Hampton Roads, you’re almost certainly in Dominion territory. Once you get out of the urban crescent, it’s hit or miss. If we just look at congressional districts, there’s a Dominion presence in 10 of 11 congressional districts, but in some districts, Dominion might not be the biggest utility. In Southwest Virginia, there’s no Dominion service at all. What would be the impact of an SCC with five members, organized by geography? I have no idea. I’m surprised, though, that the question has never come up.
OK, I promised something about oxen, so here goes. That 1973 William & Mary Law Review article on the SCC begins with the history of government regulation. The first recorded regulation came in 2300 B.C. “when the Hammurabi Code specified ‘the price at which a swift ship might be hired’ and fixed ‘the yearly rate for which a working ox could be rented.’”
The ox-renter was responsible for all aspects of the ox’s care and if the ox died, the renter was responsible for replacing it “ox for ox.” If the ox gored someone to death, the owner (or renter) was only responsible if it was known that the ox was vicious. Otherwise, well, accidents happen. If a tenant stole farm equipment or mistreated the oxen, he could be fined. If he didn’t pay the fine, then the landlord could use the oxen to tear the defaulting renter to pieces. Oxen in those days seem to have counted for more than a tenant farmer.
I hope that historical nugget was worth the wait. If not, maybe the part about how the constitution allows for a bigger SCC is.
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