Dominion's plan to give refunds to customers OK'd

State regulators have approved Dominion Virginia Power's latest proposal to forgo a requested rate increase and grant refunds to customers.

The final order of the State Corporation Commission clears the way for Dominion's 2.3 million customers to receive their first refund, as a credit on their bills, within 60 days. The agreement also will reduce bills - from $108.36 to $99.07 for a customer using 1,000 kilowatt hours of electricity per month, not including taxes and some surcharges, this year. That customer would see an estimated total bill reduction of $153 over the next 10 years.

The decision caps a yearlong process since Dominion filed a request to increase its base rates. Base rates cover Dominion's operating costs, plus a profit - or a return on equity. Dominion's base rate hasn't changed since 1999.

In September, Dominion put its requested rate increase into effect on an interim basis - as state law allows - amounting to $5.22 per month for a customer using 1,000 kilowatt hours. The commission ordered Dominion to return base rates to their prior levels and refund customers the difference charged since September, amounting to about $42, plus interest, for a customer using 1,000 kilowatt hours.

Dominion also will refund customers for two other surcharges it added in January to cover its costs to build two power plants. It can begin imposing those surcharges again this year.

Dominion will retain current base rates through Dec. 1, 2013. Base rates do not include fuel charges, which cover the company's costs to buy fuel to run power plants and can change annually.

The commission estimated that the total return to consumers is worth $726 million. That includes $529 million of Dominion's 2008 earnings that the commission deemed excessive and that will be used to offset the rate increase and other charges that the company would have imposed on customers.

Carolyn Shapiro, (757) 446-2270, carolyn.shapiro@pilotonline.com