Bills need to rise to cover higher fuel costs

RICHMOND, Va. (AP) — Dominion Energy Virginia told state regulators this week that it expects customer bills to rise significantly due to dramatic increases in fuel prices.

The state’s largest electric utility on Thursday filed an application with the State Corporation Commission to revise the component of customer electricity rates that covers fuel costs beginning July 1.

The company said it expects that by June 30 it will have to recoup $1 billion more in fuel costs than expected. Without “measures to mitigate the effect of these costs,” the typical residential customer could see their bill increase by 20%, or about $24 per month, Dominion said.

“The Company’s current fuel factor rate, based on March 2021 commodity price projections, was set prior to significant increases in the price of purchased power, coal and natural gas that were not exacerbated than by the war in Ukraine,” Edward Baine, the company’s chairman, wrote in a letter to the commission.

Instead of recovering the costs over one year, the company proposes to spread it over two or three. Its preferred option — the three-year plan — and separate rate revisions would increase the typical residential customer’s monthly bill by about 7% or $9 per month over a longer period, if approved as filed, the company said.

Dominion said in supporting documents that the three-year plan “provides the smallest near-term fuel rate increase, promotes rate stability over the next few years, and provides the Board with flexibility next year if circumstances surrounding commodity markets are improving.”

Since natural gas makes up more than 40% of the company’s total production mix, rising natural gas prices were a key driver of the increase, the company wrote.

Walton Shepherd, Virginia policy director for the Natural Resources Defense Council, said Dominion has been on a natural gas plant building spree over the past decade and customers are now “stuck paying for it.” the cost”.

Dominion is adding more renewables to its generation mix, which Baine says would help mitigate the risk of commodity price shocks. But its huge proposed offshore wind farm would also entail high investment costs.