Electricity bills would go down, then up, under a series of rate changes that Dominion Virginia Power has proposed.
The changes, which would roll out over 10 months starting in July, would mean a 6.9 percent increase in bills for a residential customer using 1,000 kilowatt hours of electricity per month. The total bill, not including taxes, would climb by $7.54 to $116.27 by May 2010.
Virginia's largest utility company filed several of the rate proposals late Tuesday with the State Corporation Commission, which would have to approve each of them.
They include the company's plan to raise base rates by about 9 percent - the first increase in Dominion's basic charges since 1992. Base rates cover Dominion's operating costs, plus a return on its investments for transmission, distribution and generation. That increase of $6.29, with usage of 1,000 kilowatt hours, could go into effect as soon as Sept. 1.
Dominion also filed plans to reduce the portion of its rates that covers the cost of fuel to run power plants, known as the "fuel factor."
The fuel change, which would take effect July 1, would drop the monthly bill by $3.64, or about 3.3 percent, for a customer using 1,000 kilowatt hours.
The fuel factor accounts for about 34 percent of a Dominion customer's monthly bill. Base rates make up the remainder of the bill, not including taxes and surcharges.
The proposed fuel decrease reflects falling wholesale energy prices over the past year. Since July 2008, Dominion customers have been paying increased fuel rates to cover a surge in prices for coal, natural gas, oil and uranium at that time, leading to an 18 percent increase in monthly bills.
The fuel decrease this year would help offset the increases to come later. In September, when base rates would go up by 9 percent, the increase in the bill would be 5.8 percent.
Other proposed Dominion rate increases would come in September, January and May 2010. The first would cover transmission service fees the company must pay to the regional operator that oversees wholesale transactions and movement of power across state lines.
Additional charges would cover construction of two new power plants. A third would help pay for Dominion's conservation programs. If they're all approved, th e charges would add an estimated $4.89 to bills by spring next year.
In its base rate proposal, Dominion has requested that state regulators approve a 13.5 percent return on equity for the company's shareholders. State law allows the company a rate of return comparable to that of other electricity providers in the Southeast.
Dominion officials said they need the base rate increase and other charges to make adequate investments in new power plants, transmission upgrades and conservation measures to address growing demand.
The company said it plans to spend $7.5 billion over the next three years on such improvements.
Since 1993, Dominion has added about 567,000 customers and expects to add another 30,000 by the end of this year.
Meanwhile, its residential rates have risen 25 percent, compared with a 52 percent increase in the average residential U.S. electricity rate, according to the Edison Electric Institute, an industry research group.
"It's pretty amazing that we've been able to go 17 years without a base rate increase," David Heacock, president of Dominion Virginia Power, said Tuesday. "The best thing we can do for Virginia and for the citizens of Virginia is to build the infrastructure that allows us to keep our costs down."
Dominion's base rate last changed in 1998, when the company agreed to a settlement with the State Corporation Commission and returned its rates to the 1992 level. In 1999, when the state began its efforts to move to a deregulated electricity industry, base rates were frozen.
A 2007 law returned Dominion to a new type of regulation, requiring it to file for new base rates by today. Under the law, Dominion has the right to implement its proposed new base rate Sept. 1. If the commission later approves a lower base rate, customers would get refunds retroactive to September.
Dominion Resources Inc., the utility's parent company, earned an operating profit of $1.83 billion in 2008, up almost 9 percent from the prior year.
Carolyn Shapiro, (757) 446-2270, carolyn.shapiro@pilotonline.com
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CEO paid for Making Dom VA Pwr money
If Dominion Virginia Power is losing money why did they pay Ferrell, their CEO, millions for making the company money last year?
Not possible
the systems paid for themselves in five to ten years.
Anyone that told you that is lying or just not good at finance. It's not mathematically possible. Water heating is pretty much the cheapest thing in a household. Just my water bill is 4x the water heater bill.
Solar
I just checked a couple of websites for prices on solar systems. Please correct me if I'm wrong but according to my calculations, a system which costs about $30,000 will produce about 750 kwh/month, saving about $60 per month. It would take over 40 years to break even, not counting interest. PLEASE tell me I'm wrong!
Solar works for some applications
I have a solar heater for my pool, and it extends our season by at least a month on each end. For heating large quantities of water to a relatively low temperature, its hard to beat solar. But it is marginal for use for home heating and preheating water for home use(you still have to raise it some to be comfortable.)
But for generation of high quantities of electricity it is a total loser.
Not again
Last time they did this they turned right around and gave a million something dollar donation to some charity. What about us(everyone else that didn't get any of that but had to pay for it)?
Who can afford this.
Enough as I try.. I pinch everything I have to the penny! I went three months without heat.. and my bill was still $290.00.. I can only imagine what my bill is going to be next winter. As much as I try to conserve, turn this light off, low my frig temp, turn my water heater temp low, take 5 minute showers, do laundry 1 a week, sleep with no heat!! my electricity bill is killing my household. I have to go into my savings to pay my bill.. The only people I find being on the peoples side is the water/sewage.. they understand and even conserving on that my bill is always low. and I love them for that. I cringe everytime at opening my electricity bill.. NEVER CONSISTENT. shame on them to want to INCREASE. I watch my meter EVERYDAY.. and still manage to to get 2500 killowatts a month!!! Something is not right, and I feel I need to go two weeks with no electricity to have a normal bill. At least I know im not the only one suffering. SAY NO TO THE INCREASE!!!!!!!!! We the people need to protest and do something about it!
Solar water heating works
When I first saw people setting up such units in the Pacific NW of all places, I thought they were being completely stupid. Years later, those same said people have upgraded their systems - and even with all the cloudy weather they get, the systems paid for themselves in five to ten years. The initial investment is what puts people off, but after that and if they take care of the system correctly, they pay off well. Think of how many sunny days we have here. Investing in solar power in this area would be a great idea. The more people that would buy into it, the cost for the systems would drop. But then Dominion Power would figure out a way to get them outlawed or you'd have to purchase the systems from them. Dominion Power is a monopoly and the only thing protecting the people of Virginia from it is a government regulatory commission. Now that is scary.
What did it cost?
EvanJ - my coworker still has a solar water heater setup on his roof in addition to the geothermal HVAC stuff. He said it's rare for the water heater to use electric because the water is always so hot from the solar setup.
But what did it cost? My bill to run the water heater runs $5-$10 a month. One of these hot water systems runs up to $5000. So, it would only have to run 40-80 maintenance free years to break even. That money is much better spent on insulation, windows, etc.
EvanJ - my coworker still
EvanJ - my coworker still has a solar water heater setup on his roof in addition to the geothermal HVAC stuff. He said it's rare for the water heater to use electric because the water is always so hot from the solar setup. He seems to indicate that the system has worked well.
Current PV panels for generating electric power are expensive, so it doesn't pencil out yet. But if Dominion keeps raising their rates it will pay for itself sooner.
Skip the solar power scams
Don't get suckered by the solar power scams. You'll pay thousands of dollars for something that doesn't do much of anything. I remember that same scam back in the 70s when fuel prices went way up and then watched as people had to pay again to get the junk removed.
michelle, what was your justification?
What facts did you present to your representative to support your opposition to the rate increase?
What's the problem? Just buy your electricity from....
the OTHER electric company if you don't like Dominion's prices or service.
Oh, that's right, you can't because its a government regulated monopoly.
Remember when there was an attempt to deregulate electric service, separating production from transmission, and everyone fought it because if the electricity business was deregulated and the market allowed to prevail, prices might go up? How's that working for you?
And now you want to make health care a government regulated monopoly. And you think that THIS TIME it will work.
Is it starting to sink in that free markets provide the best value and government monopolies (including private public partnerships and franchises) provide only expense, corruption and waste?
WHY?
Why is there only one option for power in Virginia? We get a choice of phone companies, grocery stores, etc. Why not power companies?
Email State Reps.
What I can recommend if the SCC is noncaring, is to email your state representatives. You can find out who your state rep is by going to http://conview.state.va.us/whosmy.nsf/main?openform and inserting your address. Please do this. I just wrote Joe Bouchard and let him know how I felt on the matter. I also told him I would be willing to help in any way possible. We have to let our State Reps know what is going on. They are busy with the economy right now and this may not seem as big as a priority unless their voters make it one. Flood their inboxes and mailboxes and I guarantee we can get someone to notice this.
This is ridiculous
My job got downgraded last year. So now I have to work two jobs to make ends meet. I don't get to spend near as much time with my children. These tax increases are ridiculous when the economy is in such a horrible, horrible place. Why should they get an increase when so many people are getting laid off????? Someone needs to stand up for Virginia.
Oh how I wish I could pass
Oh how I wish I could pass all my cost increases and capital costs on to my customers, guarante a 13.5% ROE to shareholders AND have profits soar 9% over last year. Oh to be a public utility. And folks, these rates quoted are for residential. Industry/commercial are not the same. Our fuel rate increase last year was 33%. We have decreased our consumption 40,000 kwh/day (number not a typo) and our cost has not dropped at all. Add cap and trade (cap and tax) to this and you will see industry leaving the USA like never before.
They've got the power
There is an issue when Dominion power sub contracts out to other electric companies to fix problems.That must cost a small fortune,why cant Dominion power pay its own employees to fix these problems.
The rich get richer and the poor get no power.
thanks for your insight
Thanks to all who have reviewed Dominions accounting and concluded that this is an unjustified big rip-off.
Energy Conservation
Rates will continue to increase. If the Cap and Trade legislation passes rayes could jump 25%.
We are an Energy Conservation company that has worked mainly with large businesses with large facilities. We recently diversified and now offer cost effective energy conservation technology and equipment for homeowners.
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Check out our website for contact info.
www.shieldsenergysavings.com
Ripping Us Off Again
These back to back rate hikes are leaving people without power and without heat. I saw my costs go up, but was still able to pay the bill-FOR the MOMENT. I know of more than one family that went without heat during the coldest weather the last few months. I saw one family evicted down the street for trying to run heat & power off a generator when they couldn't pay the electric & heat bills. I heard someone say their neighbors complained to their landlord that the generator made too much noise. There were kids in that house.
I want the names of any politician who votes to approve this hike. They do not need to be re-elected to ANY office since they do NOT know how to "Represent" the people.
Some people will be inconvenienced by the hikes, but there are many more who will go without food or medicine or heat/cool to pay these bills. And then there are the people who will dump or desert their pets because they won't be able to feed them anymore. That is already happening.