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Dominion Virginia Power filed a request with the State Corporation Commission on Tuesday asking for approval to raise rates about 18 percent, citing higher fuel costs for the energy provider.
Dominion said its costs for fuel - coal, natural gas, oil and uranium - have risen more than 200 percent since 2004 in some cases. If approved by the SCC, the increase would be $16.61 for an average residential customer using 1,000 kilowatt-hours per month and would cover the $1.1 billion in anticipated fuel costs for the 12 months beginning July 1.
Virginia resident Lori Wright isn't happy about the proposal. "I think that seems kind of high. The rates are already high and going higher, might be sort of painful, especially with the summer coming up."
"The fact of the matter is, we cannot control commodity prices," Mark McGettrick, president and CEO of Dominion Generation, said in a media briefing. "We can only make prudent purchases and that's what we've done."
The Richmond utility said it also is proposing to defer an estimated $697 million in fuel costs it incurred since a 4 percent increase implemented last July. That amount would be collected over three years, starting in July 2009. Without the deferred amount, the increase would have been about 22 percent for the average customer.
Under state law, the company does not make a profit on fuel rate increases. And no increase is being requested on the rate that covers base costs such as customer service and electricity delivery, the company said.
McGettrick said Dominion is making efforts to mitigate these costs by controlling generation at its plants, a proposed coal-and-biomass-fired power plant in Wise County, and using a new facility at its Chesapeake energy center to import lower-cost coal from South America.
"We realize this increase is going to be hard on our customers, especially those on fixed income," said Dave Heacock, president of Dominion Virginia Power.
Heacock said the company is taking steps to help customers cope with the increased rates, including additional contributions to its program that helps low-income customers pay their heating and cooling bills, and changes to its budget billing plan. It also is opening budget billing to small business, nonprofit and house-of-worship customers. "We have also expanded it to include cooling assistance as well as heating assistance because for many families their highest usage is in the summer months, not just in the winter months," said David Shuford.
Some frustrated residents are finding ways to avoid using electricity. "Clothes dryers use a lot of electricity, so we've thought about hanging the clothes out, but we don't know if we'll actually get there. It seems like a lot of work."
The SCC will hold a public hearing before acting on the application.
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