Dominion Virginia Power seeks lower fuel rate
10/15/2013, 3:40 p.m.
Dominion Virginia Power has asked the State Corporation Commission of Virginia (SCC) for approval to reduce the company’s fuel charge and lower customer electricity bills.
Dominion notes that if approved, the change would reduce the bill of a typical residential customer using 1,000 kilowatt-hours of electricity a month by $3.70, from $112.05 to $108.35, or about 3.3 percent. Customers using larger amounts of electricity would see greater reductions.
“While the next adjustment in the fuel charge is not required for another seven months, we believe the circumstances in this case warrant passing along the savings to our customers as soon as possible,” said Paul Koonce, chief operating officer of Dominion Virginia Power. “We recognize that many customers are facing financial challenges in this difficult economy.”
The company asked that the change take effect Dec. 1.
If the request is approved, Dominion said its overall electric rates will be down at virtually the same level they were more than five years ago, when the significant portions of the 2007 law re-regulating Virginia electric utilities went into effect, despite major investments by the company in new power stations and electric grid infrastructure to increase reliability and meet growth.
The fuel charge pays for fuel the company uses in its power stations to produce electricity, including natural gas, coal and uranium. It is charged on a dollar-for-dollar pass through without any mark-up or profit to the company.
Dominion Virginia Power notes that it spends nearly $2 billion annually on fuel and related expenses for its Virginia customers. The company is requesting that more than $140 million be returned to customers as a result of the savings due to lower-than-expected fuel prices and mild weather.
The fuel charge comprises about 25 percent of a typical residential bill but substantially more for large industrial customers, meaning they could see significantly greater savings. The remaining part of the bill covers operating and maintenance costs as well as investments in power stations, the transmission grid and other infrastructure to support reliable electric service for customers.
By state law, the company files a fuel case only once a year, normally around May 1. The fuel rate normally changes on July 1 each year.