By Steve Haner

The State Corporation Commission Friday approved two separate increases in Dominion Energy Virginia’s rates; one caused by the Virginia Clean Economy Act (VCEA) and the other related to regional transmission services. Combined they add more than $5 to a 1,000-kilowatt hour residential bill effective September 1. 

The VCEA driven increase is an additional $2.99 on what is called Rider RPS, for “renewable portfolio standard.” The case ended with Dominion approved to collect the $609 million over one year that was pending earlier this year. The money is not for electricity or power lines or operating cost, but for intangible “renewable energy certificates” Dominion must buy because it missed the VCEA’s goals for its own renewable production.

The transmission increase is another $2.10 which is passed through to pay the regional PJM Interconnection energy marketplace, in this case for transmission and for the demand reduction programs it operates. The SCC doesn’t set transmission rates but accepts those imposed by the Federal Energy Regulatory Commission (FERC.)  That is imposed on bills through Rider T1. (You can find a list of all Dominion riders, costs in addition to base rates, here.)

The two rider increases come in addition to an increase in the portion of the monthly bill dedicated to collecting fuel costs, which is Rider A. Effective July 1, the basic fuel charge for Dominion customers – in this case all types of customers pay the same per kWh – rose from $20.74 to $29.68 per 1,000 kWh, a healthy 43% jump.   That should just be hitting bills now.

On July 29 the SCC approved yet another rate hike, this one for a brand new rate adjustment clause or RAC, Rider SMR. Also effective September 1, another $0.29 will be added to Dominion bills to collect over the next year the research and planning costs for a possible small modular reactor project. The word possible applies because there is no promise from the company to build anything.  Watch for Rider SMR to grow substantially if a go decision on construction is made. 

So, to tally them up, there are four bill increases adding $14.32 to that illustrative 1,000 kWh residential bill. As many are painfully aware, especially in a hot summer or cold winter month, plenty of households see bills using far more than that. Should that be your average every month, the four total just under $172 for a year. For commercial and industrial users, the per kWh rates are often lower (except on fuel) but the final cost can be substantial (especially on fuel.)

Dominion is not done with the fuel charge, by the way, and it could rise again this year if one key part of its pending fuel application is approved. Dominion is asking permission to begin charging customers directly for the energy capacity payments it must make to generators in the regional PJM Interconnection. The explosive growth in those was reported last month, but so far Dominion is paying them out of the base rates. It wants to shift and begin collecting the capacity contract costs with fuel in Rider A.

The rise for Dominion in the cost of a capacity contact from $29 per megawatt-day in June 2024 to $444 per MW-day this year and $330 starting next July is also related to the VCEA and similar policy laws elsewhere in PJM. Those laws have pushed the rapid closure of reliable hydrocarbon electricity plants across PJM, creating a massive supply and demand crunch. But they really have not hit your bill yet and will not until the SCC finishes with that application.  
Another price increase totally due to the VCEA is also still pending at the SCC. It will soon finish with Dominion’s application to increase the amount it charges customers for the offshore wind project. Absent the huge boost given the project by the General Assembly in VCEA provisions, the project might never have been deemed reasonable and prudent by the regulators. 

Still moving around in the background are Dominion’s request to increase its base rate and to build a new natural-gas fired 944-MW generator in Chesterfield. Both those cases are at full steam for the fall.

The upward trend is inexorable. When it comes to your electric bill, just keep Roseanne Rosanna Danna in mind. If it isn’t one thing, it’s another, but it’s always something. As has been pointed out previously, the portions of the bill directly related to Virginia Clean Economy Act compliance used to be more clear than they are now. Bets on whether the broader media report any of this?