Following new utility law, Dominion files for bill reductions
Dominion Energy offices in Richmond, Va. (Parker Michels-Boyce/ For The Virginia Mercury)
Dominion Energy is asking the State Corporation Commission to approve plans to reduce customer bills starting this summer in response to legislation that passed during the 2023 General Assembly session.
The fillings include a request to roll three riders — fees tacked onto customers’ bills for particular projects — into base rates and another request to pay for steep fuel costs using a tool known as fuel securitization. If approved, Dominion estimates each measure would reduce the average residential monthly bill by about $7, for a total reduction of about $14 dollars per month.
The three riders, or rate adjustment clauses, affected would be those that cover the costs of the natural gas Bear Garden and Warren County power stations and the biomass- and coal-fueled Virginia City Hybrid Energy Center.
Fuel securitization is a way to spread out payment for fuel costs by issuing bonds and then paying them down by recovering costs from customers over a period of time.
During negotiations over legislation allowing fuel securitization this session, Dominion estimated the approach would prevent residential customers from seeing a $17 monthly bill spike over the summer because of high global gas prices. Instead, the utility projected securitization would result in monthly bills only rising by $2.50 to cover fuel costs.
However, changes in commodities prices have further cushioned the impact.
Dominion is asking regulators to allow the bill reductions to go into effect on a temporary basis starting July 1 before filing a full fuel securitization plan.
“We must keep our rates as affordable as possible, especially given the economic pressures affecting our customers,” said Ed Baine, president of Dominion Energy Virginia, in a release. “Earlier this year we promised substantial rate relief for our customers. Thanks to bipartisan legislation and broad support from consumer advocates, we are delivering on that promise. This will provide immediate relief for our customers now and ongoing savings in the future.”
The idea of folding the riders into base rates was introduced this winter as part of broader legislation backed by Dominion to rejigger how the state regulates its two largest electric utilities. After pushback from environmental and ratepayer advocacy groups because the legislation would have also increased Dominion’s profit level, the utilities proposed the fuel securitization concept.
A final agreement, brokered in part by Republican Gov. Glenn Youngkin, ultimately included a modest increase to the utility’s profit level while also explicitly giving the SCC authority to set future rates as it sees fit.
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