Dominion Energy agrees to cut rates, power bills will drop
Published 1:42 am Thursday, July 6, 2023
The majority of residential power bills from Dominion Energy will be lower, starting this month. As of July 1, Dominion Energy Virginia announced it would be lowering rates by $14 a month, dropping 20% below the national average and 39% below the regional average.
Dominion becomes the second company in the region to announce changes to their rate structure. In late June, Southside Electric Cooperative announced a similar measure, with customers expected to see an $8 decline in bills per month.
Dominion officials said Wednesday their decision was based on two things. First, they pointed to a bill passed in this year’s General Assembly, which eliminated an estimated $7 in monthly charges for customers. Also, the bill allows the company to spread fuel costs over a multi-year period, which lowers the monthly fuel charge by another $7 per customer.
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The lower fuel charge will remain on a temporary basis, Dominion officials said. It’ll become permanent once the Virginia State Corporation Commission (SCC) approves the company’s long-term fuel charges. When reached by The Herald, Dominion officials pointed to the fact the change means they’ll be 20% below the national average and 39% below the average for power bills on the East Coast.
“At a time when consumers are paying higher prices for most goods and services, we’re pleased to lower our customers’ rates,” said Ed Baine, President of Dominion Energy Virginia, in a statement provided to The Herald. “This will provide immediate relief for our customers now and ongoing savings in the future. It’s an important part of our mission of delivering reliable, affordable and increasingly clean energy to our customers.”
Under the new law, Dominion has to file with the SCC every two years for a base rate review. During that review, the SCC will assess the company’s “base rates,” which account for about half of a residential customer’s monthly bill. Dominion officials said the company is not seeking an increase to its base rates under
How this works for Dominion Energy
Power companies in Virginia are required to submit their finances every two years for a review of their base rates, which makes up 60 percent of a customer’s final bill. The state corporation commission then examines the rates and makes sure each company is within the required limits. Each company is limited on the amount of profit they can make off their investment, known as the rate of return, with the intent of preventing price gouging. For Dominion, the rate of return is 10.7 percent.
Senate Bill 1349, the bull approved in 2015, put a temporary stop to all of that. That bill required both Appalachian Power and Dominion to freeze their base rates for a set period of time. Appalachian’s rate was frozen until 2020 and Dominion’s rate until 2021. The companies were also responsible to cover the costs of repair after any major storms during this time, rather than passing that on through base rates, as part of the law.
Dominion was also required to commit to $57 million in weatherization and educational outreach for low-income and elderly customers. In exchange, however, those biennial reviews were canceled, so the corporation commission wasn’t allowed to determine if the rates were within the designated limits. Also, the two companies were still allowed to increase other fees, through a process known as adding riders. Since 2009, Dominion had 15 riders, the SCC’s records show.
Now that changes, with things going back to the way they were before the 2015 bill.