Dominion Energy's Rent-Seeking Activities

    Dominion Energy holds government-granted monopoly power over electricity in Virginia - allowing the company to earn 1.1 billion dollars of profit over the past four years. This translates to the corporation earning economic profit, or in other words, rent (returns greater than opportunity cost). Despite public frustration with increased producer surplus (and thereby reduced consumer surplus), Tullock would argue that the rent itself is allocatively efficient. Dominion Energy's monopoly power is redistributing resources from consumers to producers. While this may be considered normatively bad, it is still economically efficient. However, the rent-seeking activities that Dominion Energy engages in in order to retain monopoly power are allocatively inefficient. 

    Virginia Public Media reports that Dominion Energy spent over 2,872,817 dollars over the past four years in rent-seeking activities. This results in a misallocation of resources in order to pursue economic profit and is where the economic problem lies. Instead of spending resources on producing electricity, Dominion Energy is using resources to pay Gordon Morse to write favorable articles about the company in the Virginian-Pilot. Additionally, they are paying lawmakers such as GOP delegate John H. Rust Jr. and former Senator John Watkins. Finally, the report found lobbying happening within the UVA Center for Politics based on payment one of the professors received from Dominion Energy. In engaging in these rent-seeking activities, Dominion is straying from their comparative advantage and misallocating resources. Rent-seeking activities such as these highlight the issues surrounding government-granted monopolies.