RICHMOND — The State Corporation Commission (SCC) has
approved a new fuel rate requested by Dominion Virginia Power that will take effect
on July 1. The SCC accepted a plan that will spread the higher costs for fuel over
a two-year period instead of the normal one-year recovery period. Ratepayers are
not charged the financing costs of spreading the payment over two years.
For the average residential customer, the fuel rate increase means the monthly bill
for 1,000 kilowatt hours of electricity will increase $4.86 from $103.91 to $108.77.
If the full increase was recovered in one year, the monthly bill of a residential
customer would increase $8.17 to $112.08.
According to Dominion Virginia Power, the increase was driven, for the most part,
by rising fuel prices and the effect of last year’s hotter-than-normal summer and
The fuel rate is the portion of the electric bill that pays for the fuel used to
generate electricity and the purchase of power from the wholesale market. Dominion
Virginia Power is statutorily entitled to recover its prudently incurred fuel costs.
This is a dollar-for-dollar recovery, and the company can make no profit on recovery
of fuel expenses.
The fuel rate is reviewed annually by the SCC and re-set, as necessary, to reflect
actual fuel expenses for the previous year and projected fuel expenses for the coming
Case Number PUE-2011-00045