RICHMOND
For a range of Dominion Virginia Power customers, an 18 percent boost in electricity bills would be a heavy burden amid today's other economic pressures.
But the company's requested rate increase covers only a fraction of the total amount it says it has spent and expects to spend on the fuel needed to run power plants. Even paying an additional 18 percent, consumers could face more pain down the road if energy prices continue to escalate.
"Quite frankly, I think we're between a rock and a hard place," said C. Meade Browder Jr., a senior assistant attorney general who represents Virginia consumers in utility rate cases. He spoke Tuesday during a State Corporation Commission hearing on Dominion's fuel rate proposal.
The bulk of the public hearing focused on the possibility that the company would seek greater future rate boosts in order to keep the increase at about 18 percent this year. Dominion, based in Richmond, has proposed collecting an additional $1.1 billion in the next 12 months by raising its "fuel factor," the portion of its monthly supply charges that cover the costs to buy coal, oil, natural gas and uranium. State law allows the company to recoup those costs, which it passes through to customers without a markup for profit.
For residents who use 1,000 kilowatt-hours of electricity per month, bills would climb by $16.61 to $107.20 under the change, scheduled to take effect July 1. Commercial customers would see their electricity costs jump by 40 percent or more.
"We've had so many increases in other areas," said Judy Harris, one of the few consumers who spoke at the hearing. The Chesterfield resident, retired for 10 years and living on a fixed income, said she sets her home thermostat at 82 degrees. "If this increase, the 18 percent, is passed, we may just have to cut our air off."
Since July 2007, Dominion has paid $697 million for fuel that remains uncollected from ratepayers. The company initially proposed spreading the recovery of that amount over three years, starting in July 2009, to minimize the growth of bills this year. The $1.1 billion would have accounted only for the company's projected fuel expenses for the coming year.
The commission staff, however, argued that state law won't allow the company to defer the entire $697 million for another year and requires it to begin collecting the money in 2008. So Dominion presented a different approach Tuesday to recoup about one-third of that amount this year, $231 million, and to reduce its projected fuel expenses so that the proposed rate increase would remain the same.
As part of that new "stipulation," Dominion agreed to forgo asking its ratepayers to cover any interest on that deferred amount in the future.
Dominion's stipulation has the support of the Virginia attorney general's office, representatives of large industrial customers and retailers, and the Apartment and Office Building Association of Metropolitan Washington. At the same time, the commission's staff and some of those representatives raised concerns about putting off the inevitable "rate shock," as Browder put it, that is likely to come later.
The commission is expected to make a decision on the proposal within a week.
Some Hampton Roads residents and city officials sent letters to the commission since Dominion announced the proposed rate increase in early May. Many, like those who commented in person Tuesday, referred to the pain of the power costs in addition to other economic pressures.
"In today's economy, we, the citizens, are feeling the pinch harder than Virginia Power," Robin Smith, a Virginia Beach resident, wrote to the commission. "Please, while considering an increase, remember there is one back these increasing costs end up on: that of the average citizen."
Suffolk and Virginia Beach cited the effect of the new rate on their budgets, possibly leading to cuts in city services. The timing of the fuel factor case, months after the cities developed their budgets, makes the increase difficult to absorb, wrote Selena Cuffee-Glenn, Suffolk's city manager.
"Like most other localities, the city of Suffolk was unaware that Dominion Virginia Power was planning to apply for an increase in its fuel factor until after the 2008-09 operating budget was prepared," she wrote. It would be helpful, she added, if Dominion "gave consideration to delaying the implementation of the fuel factor increase to provide its local government customers with the opportunity to plan for dramatic changes in the cost of service."
Carolyn Shapiro, (757) 446-2270, carolyn.shapiro@pilotonline.com
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Follow your own advice, george
George, my good man, I agree with your advice. I have contacted my Congresswoman, my Senators, and intend to spend some time this weekend composing letters to my state representatives. I notice you spend a lot of time posting to the boards here, so I have to ask, have you also gotten involved? Have you written, called, or otherwise engaged your representatives on the issues, or do you just sit there 12 hours a day waiting for your chance to post another of your endless comments? I surmise that if you spent half the time following your own advice, instead of dictating to us how we should feel, what our rights ought to be, and what we should think or believe, you might actually get something accomplished. As for running for office, I think you should. It appears you certainly have the time for it.
USA
United
Scam
Artists
What we don't do, but should
What we don't do and should do is constantly be in touch with our elected officals regardless if they are your party or not. We should all sign up for congress, org to get the voting record of how our officals vote, plus upcoming issues so we can contact them ahead of time. Please don't say it doesn't do any good, because I assure you doing nothing does less. We elected these people and we need to make sure we are heard. If not they will do as they please thinking all is well until after the fact. Get involved!
no hope!
I guess dominion figures, hey they get gouged at the pumps, so lets all join in and raise the prices.......somone has to pay for those union wages.........huh?.......
I don't know how these
I don't know how these companies think they'll make more money by raising their rates. The average consumer is tapped out and will just have to cut back on usage. This will hurt old and young alike. Those of us trying to raise children, pay for healthcare ($983/month for my family + copays, etc), and still have something to put away for retirement (there won't be any SS left, you know) are really being left strapped by the rising costs. It's become difficult to purchase healthy foods as they cost more, gas is beyond unaffordable, and now they want to raise electricity and natural gas costs. Why can't they cut costs like all the other private sector employers! My husband's company made their insurance so unattractive and expensive that almost all of the employee's found it cheaper to buy their own. They also went 7 years without a raise. You don't see the bigger companies and government entities
The sad part is....
The sad part is we have no other choice. Both Dominion and VNG have no competition, and we have no voice in the process of higher prices. If we want to talk about 'change" then we better start there.
Yep, it's a conspiracy
Yep, it's some evil politicians and CEOs using their mind control beam to make the millions of traders around the world do what they want. It's quite brilliant really.
no doubt
their costs are increasing. what they don't discuss is what they are doing to reduce costs. i heard nothing about hiring freezes, consolidation, or anything else.
Greed is good!
Michael Brush of MSNBC Money recently wrote: "In 1940, U.S. corporations paid their chief executives 48 times as much as the average worker, on average. Last year, CEOs earned....a huge 262 times more than the average worker." I have no doubt that increasing electricity by 18% and natural gas by 35% will help our CEOs and their corporate poodles keep these statistics intact.
Be assured that the average citizen will bear the brunt of this, since not only will they pay their share through direct usage, but they'll also pay through increased prices by Corporate America to cover, many times over, their own higher energy costs.
Remember what Gordon Gekko said in the movie "Wall Street"?...."Greed is good"! Sure is. Pays well too. Just not for the average worker.
Amen Scott
Of course the businesses love it, they get to raise their prices too and since it's all about getting more money, what do they care who they screw. Since I'm just an average working person who's not going to see an 18% increase in my salary to cover my Va. Power bill; or a 35% increase to cover the VNG bill; or an increase to cover of whatever percentage rate gas will continue to go up, I'm so screwed. This news on top of everything els, makes me ready to turn my back on america, it's just a pile of excrement that is stinking to high heaven.
Big Business vs. Individual Consumer
I can understand that Dominion needs to maintain their bottom line, but so does every consumer in Virginia. Dominion provides what is, for all intents and purposes, a necessity. The average consumer, living on a tight budget, cannot afford this high of a rate increase. Dominion will find itself spending more money on collections and harassment letters because consumers cannot afford the instant rate hike.
When Dominion cannot quite make its bottom line, it can borrow temporarily to make up the difference or cut CEO bonuses. When the individual consumer cannot make his/her bottom line, they end up cold and in the dark. Dominion and our legislators need to consider that.
Groups represented
Everyone of those groups except the attorney general's office can and will pass the increase on to the consumers. No wonder they're for it. The attorney general does not represent this consumer.