Dominion Requests To Raise Electric Rates By $9
Citing increases in the cost of fuels needed to keep power plants running, Dominion Energy has asked the SCC for permission to raise residential electric rates in Virginia by $9 per month.
Under state law, regulated utilities are permitted to recover fuel costs via customer electric bills, meaning that increasing natural gas and coal prices can lead to higher electric rates.
By continuing to develop renewable energy throughout the state, Virginians can begin to see lower electric rates that aren’t subject to turbulent natural gas markets.
In a filing submitted to the State Corporation Commission this month, Dominion Energy asked for permission to raise electric rates by roughly $9 per month for residential customers in Virginia. That adds up to an additional $108 in energy costs per year. Dominion’s rate increase request comes less than a year after it was revealed the public utility overcharged customers $1.2 billion since 2015. But because of the flawed 2018 Grid Transformation and Security Act, just $372 million was able to be refunded to Virginia customers. Call your Delegate and Senator today and urge them to eliminate provisions of state law allowing public utilities to earn excess profits.
Dominion is justifying their current request to raise residential electric rates by $9 per month by noting that the cost of purchasing fuels like natural gas and coal to keep its power plants running has increased substantially in recent weeks. Under Virginia state law, regulated utilities like Dominion are permitted to raise customer rates in order to recover fuel costs. Rate adjustments intended to recover fuel costs are not legally able to increase utility profits, however.
Call your Delegate and Senator and ask them to place the burden of fuel costs on utilities, not customers. This would bring down the cost of electricity for customers in Virginia while incentivizing the development of renewables, which don’t rely on expensive natural gas.
In a testimony to the SCC, Dominion representatives said that a significant rise in the cost of fuel is driving the need to raise customer rates. Dominion’s SCC filing coincides with gas prices in Virginia hovering around all-time highs. Virginia is not the only state facing high electric costs; between January 2021 and January 2022, the average cost of residential electricity nationally rose 8%. The increase can be attributed to the ongoing COVID-19 pandemic, the war in Ukraine, as well as supply chain disruptions.
Dominion's request to raise residential electric rates — which are already higher on average than electric rates in other states — is indicative of the need to wean Virginia off of its natural gas dependency. With state law permitting regulated utilities to recover the cost of fuel needed to keep power plants running, Virginians will be subject to electric rates determined by a turbulent natural gas market.
This means that with every investment in natural gas plants — Dominion has added nearly 5 GW of natural gas generation facilities since 2009 — the electric rates Virginians pay are subject to volatile increases. Laws passed in Virginia permitting the continued use of natural gas in the state will have the same effect. On the campaign trail in 2021, Gov. Glenn Youngkin said that in order to meet the demands of the “rip-roaring economy” he intended to build, coal and natural gas would continue to figure prominently within Virginia’s energy landscape. Dominion’s SCC filing illustrates the opposite is true — continued reliance on natural gas is an economic burden on Virginia residents.
The best way to lower electric rates in Virginia is to meet the goals of the Clean Economy Act. That entails phasing out coal and natural gas entirely while ramping up development of wind and solar facilities. Doing so would eliminate Dominion’s need to purchase natural gas and coal to keep power plants running. In turn, this would also eliminate Dominion’s need to raise customer rates to cover increasingly expensive fossil fuels.
For the first time ever, solar facilities in Virginia generated more electricity than coal did in 2021. This fact shows it’s possible to power a state without costly generation sources like natural gas. Still, though, natural gas generates 51.4% of Virginia’s electricity. Renewables account for 6.4% of Virginia’s electricity, while coal generates just 5.1% of the state’s electricity.
Renewables are more cost effective than fossil fuels. An analysis released in 2020 shows coal costing $41 per MWh, compared to utility scale solar costing $31 per MWh. In the Mid-Atlantic region, natural gas currently costs $90.94 per MWh. With the price of natural gas tripling in just a few short months, renewables are the most cost-effective source of electricity.
Because it would put an end to the days of utilities turning to customers to recover fuel costs, it’s in the public interest to power Virginia’s clean energy future with renewables.
Dominion’s SCC filing can be reviewed here. Although the SCC is not accepting public comment on the case yet, Powered By Facts will send out an alert when commenting becomes available so you can make your voice heard. In the meantime, be sure to call your Delegate and Senator to advocate for not only the elimination of state law allowing utilities to earn excess profits, but also to place the burden of fuel costs on utilities, not customers.