Proposed Dominion rate settlement would keep customer base rates stable for next two years

By: - November 15, 2023 2:20 pm
The State Corporation Commission

The State Corporation Commission regulates Virginia electric utilities. (Ned Oliver/ Virginia Mercury)

Dominion Energy Virginia customers would see no increase in base rates for electric service over the next two years under an agreement between the utility and ratepayer, environmental and other groups announced Tuesday evening.

In addition to maintaining current base rates — the primary component of customers’ electric bills, based on how much power they use — the settlement would increase the profit level Dominion is allowed to earn from 9.35% to 9.7% and require that $15 million be credited to customers by the end of September 2024. 

The Office of the Attorney General, State Corporation Commission staff, Appalachian Voices, the Data Center Coalition, the Department of the Navy, Google, Harris Teeter, Walmart and the Virginia Committee for Fair Utility Rates all signed onto the agreement, which must still be approved by the State Corporation Commission to go into effect. 

Dominion Energy Virginia President Ed Baine in a statement described the proposal as “fair and reasonable.”

The settlement proposal follows sweeping legislation passed by the Virginia General Assembly this year to overhaul the state’s system of electric utility regulation.

General Assembly deal sets Dominion profits for two years while overhauling regulatory system

Prior to the legislation, the State Corporation Commission reviewed Dominion’s rates and earnings every three years. Under the new law, reviews will occur every two years.

Additionally, the legislation required that Dominion’s profit margin be set at 9.7% for the next two years — an outcome reflected in Tuesday’s agreement — and that the utility roll $350 million worth of riders, which are added to customer bills to cover the costs of specific projects, into base rates.  

This year’s review found that Dominion’s profit level over the past three years was 9.04%, below the 9.35% mark the SCC authorized during its last review. That level fell within a range known as an earnings collar. According to state law in place for the last decade-plus, if earnings exceeded the upper limit of that collar, the utility had to issue refunds; if they fell below the lower limit, rates had to increase. If earnings were within the collar, rates would go unchanged.

The collar was used for the last time in this case before new legislation gets rid of it. In the future, regulators will compare earnings directly against the profit level and set future rates as they see fit.

Several groups involved in this year’s rate review did not sign onto the agreement but are not opposing it. They include the Virginia Poverty Law Center, which has praised steps Dominion has agreed to take to be more transparent about disconnection practices but wants the utility to provide more payment plan options with longer terms to help low-income customers struggling to pay their bills.

“I think they missed an opportunity to work with their customers,” said Dana Wiggins, director of consumer advocacy at the Virginia Poverty Law Center.

The commission will review the agreement and is expected to make a decision early next year.


Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.

Charlie Paullin
Charlie Paullin

Charles Paullin covers energy and environment for the Mercury. He previously worked for Northern Virginia Daily in the Northern Shenandoah Valley and for the New Britain Herald in central Connecticut. An Alexandria native, Charles graduated from the University of Hartford initially wanting to cover sports. He's received several Virginia Press Association awards for his coverage of crime, local government and state politics.