Virginia Commission Authorizes Fuel Rate Increase for Dominion Energy

The Virginia State Corporation Commission on Sept. 16 authorized a rise to the fuel rate for customers of Dominion Energy Inc. that involves a mitigation plan, which would lay out the recovery of the $1.02 billion projected fuel deferral over three years. Moreover, the commission approved a provision under which Dominion agreed to renounce recovery of one half of its incremental carrying costs occurring from the three year mitigation plan, around $27.5 million.

Regulation in Virginia permits utilities to pass-over costs for fuel production to consumers in a procedure that’s tightly controlled by the commission. On May 5, the utility requested for a modification to its fuel factor, stating that fuel costs from the July 2021-June 2022 year led to additional expenditures of $1.02 billion. The adjustment to the fuel rate is required to deal with significantly higher costs of gas. Dominion Energy uses natural gas to create electricity, and the fuel is required to produce nearly 40 percent of the country’s power. Natural gas and coal fuel commodities have witnessed increases of around 100 percent and 92 percent for the period between July 2021-March 2022 compared with the period July 2020-March 2021.

The fuel rate is the segment of the power bill that pays for the fuel used to produce electricity and expenditures related with electricity purchased by the utility to assist its customers. The rate increase came into force on an interim basis on July 1, 2022. For a residential customer using 1,000 kilowatt hours of electricity per month, the increase equates to an increase of $14.93 in the monthly bill.

A number of establishments filed public comment with regards to Dominion’s application.