Power rates to rise

Published 10:15 am Wednesday, May 4, 2011

RICHMOND—Dominion Virginia Power has proposed three rate increases over the next 11 months. If approved, the utility’s 5,000 residential customers in Southampton County and 13,000 in Isle of Wight County can expect to pay up to $12.76 more a month for electricity.

The new fee reflects the total of increases proposed for July 1, Sept. 1 and next April 1, according to a news release from the utility.

In related matters, the average residential customer in the City of Franklin will see an increase of $4.82 on bills sent out this month, said Mike Stoneham, former director of power and light for the city, who is filling in until the new director begins working.

Dominion Power has asked the Virginia State Corporation Commission to approve three rate increases.

The first is to support fuel costs, which hasn’t been done in three years, according to a news release.

If approved under a two-year proposal, the typical residential customer who uses 1,000 kilowatt hours will pay $4.86 more a month. The bill will increase from $103.91 to $108.77 beginning July 1.

If regulators decline the two-year proposal and opt for a one-year plan, the same monthly bill would increase by $8.17 from $103.91 to $112.08 beginning July 1.

“Normally you receive fuel costs over a one-year period,” said Dan Genest, spokesman for Dominion Virginia Power in Richmond. “If we recover over one year, it would be the $8.17.”

The fuel rate is a pass-through cost with no profit to Dominion. This rate is adjusted annually to recover what the utility spends on fuel at its nuclear, biomass, coal, natural gas and oil electricity-generating units as well as power it must purchase from the wholesale market.

Dominion is also asking for an annual rate adjustment for its transmission system. Projects include replacing aging equipment, adding new infrastructure and covering the costs of services for the regional grid operator, according to the news release.

If approved, that will mean that the typical residential customer would pay $3.84 more per month, going from $6.16 to $10, beginning Sept. 1.

The final increase would help pay for the $1.1 billion Warren County Power Station near Front Royal in Northern Virginia. The natural gas-fired power station is scheduled to begin operating in late 2014.

If approved, the typical residential customer’s monthly bill would increase by 75 cents beginning April 1 to pay for the financing costs of the power station’s construction for a 12-month period.

The City of Franklin buys power from Dominion through the Virginia Municipal Electric Association.

City Manager June Fleming said the city’s contract with the association has rates set until sometime in 2012. However, adjustments in fuel charges can be passed on to customers.

“We were just notified a week or so ago, through VEMA, that Dominion’s fuel rates were going up effective April 1,” said Stoneham.

He understands that a typical residential customer who uses 1,000 kilowatts a month on April 1 saw the fuel portion of his bill increased from $12.41 to $17.23. That rate will remain the same through March 30.

Franklin has 5,600 customers who get power through Virginia Dominion.

Stoneham said at some time, he expects increased rates for the transmission system and new plant in Warren to be passed on to Franklin customers.

“The Franklin customers need to understand this rate increase by Dominion is for their retail customers,” he said. “We are a wholesale customer. It impacts us different than the standard retail customer.”