SCC partially approves Dominion rider that will increase bills

Dominion Energy's coal-fired Chesterfield Power Station. (Ryan Kelly)

Electric bills will go up for Dominion customers after the State Corporation Commission on Monday approved the utility’s request to recoup some of the costs it sank into complying with new federal and state environmental regulations in 2015 — but maybe not as much as the company would have liked.

The SCC’s decision allows Dominion to add a rider, an extra charge levied for a specific purpose, to customers’ bills to pay for actions it took at its Chesterfield, Mt. Storm and Clover power plants to comply with more stringent laws governing coal combustion residuals, better known as coal ash.

Dominion’s original application sought to recover $302 million in compliance costs. However, that request faced stiff resistance from the Sierra Club and the Virginia Office of the Attorney General’s Division of Consumer Counsel, which argued that the money the utility spent to retrofit two coal-fired units at the Chesterfield Power Station had been an imprudent investment in light of its plans to retire them within five years. Consequently, they contended, the costs of that choice should not be passed on to customers.

The SCC agreed with that argument Monday, finding that Dominion had not established that the investment, which totaled about $18 million, “was reasonable and prudent at the time.”

Both of the units in question were permanently retired in March 2019.

The commission did approve the recovery of costs related to the retrofitting of two other units at Chesterfield that are still in operation today, as well as those related to work at the Mt. Storm and Clover facilities.

Exactly how much the rider, known as Rider E, will add to customers’ bills each month was not clear Monday. The company’s first filing for permission to impose the rider in December 2018 estimated that it would add about $2.15 to the monthly bill of a residential customer using 1,000 kilowatt-hours. Later analyses brought this estimate down to about $1.62 per month.

But under the commission’s final order, the increase could be higher than $1.62, said SCC spokesman Ken Schrad in an email.

That’s because the commission didn’t specify in its order a revenue requirement, or the amount that Dominion allowed to recover from customers. Furthermore, Dominion will be allowed to recover some costs over five years instead of 10, which means ratepayers may carry a higher burden over a shorter time period.

Schrad said that a “ball park estimate” of bill increases is just under $2 per month, but no final number will be available until Dominion files its Rider E tariff with the commission in the next 30 days.

The rider will take effect no later than Nov. 1. It is the fifteenth rider that the utility has been allowed to add to customer bills since 2007.