Dominion requests rate hike that could increase power bills by $20 a month

Yahoo

01-04-2025

Dominion Energy has requested rate increases that could tack on nearly $20 to the average customer's bill by next year to accommodate for the 'cost of labor, materials and equipment, power capacity and fuel,' the energy provider announced Tuesday.
Dominion Energy filed rate increase requests, which propose new base and fuel rates, with the Virginia State Corporation Commission Monday. The commission is the regulatory agency in charge of the state's utilities and would need to approve any rate increase.
Specifically, Dominion requested base rate increases of $8.51 per month starting in January 2026 for residential customers, and another $2.00 per month starting in January 2027. This would be the first increase of the base rate, or the base cost of generating power, since 1992.
The proposed new fuel rates — or the part of the power bill that pays for fuel used to generate electricity — would go into effect in July. Dominion is proposing an approximately $10.92 monthly fuel rate increase for residential customers. According to Dominion, the increase will 'reflect the increasing demand for power' in the region, such as the extended cold and freezing weather in Virginia earlier this year and higher forecast fuel commodity prices.
Rising power bills are also affected by 'riders' or RACs, or rate adjustment clauses. These clauses allow Dominion to recover costs associated with specific projects, like building new infrastructure, through additional costs on bills.
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Ed Baine, president of utility operations and Dominion Energy Virginia, said in a statement that Dominion is dedicated to 'providing exceptional value' for customers.
'Outside of major storms, we deliver uninterrupted power 99.9% of the time, and we're significantly reducing storm-related outages as well. This proposal allows us to continue investing in reliability and to serve our customers' growing needs,' Baine said.
In October, Dominion Energy filed its Integrated Resource Plan, a long-term planning document for the next 15-20 years, with the commission. In the plan, Dominion maps out a forecast of demand and its plan to meet it. The proposed IRP reports that demand is forecast to increase 5.5% annually over the next decade and double by 2039.
Rapid data center expansion in Virginia is driving at least part of that increase, with Dominion noting in the IRP that it serves the largest data center market in the world. The IRP says peak loads have been increasing each year and are expected to continue to grow.
A report issued last year by the state's Joint Legislative Audit and Review Commission highlighted the environmental and energy costs associated with data centers. If the industry continues to grow unrestrained, the nonpartisan report predicts the state energy demand is projected to double in the next 10 years, largely driven by data centers. State lawmakers sought to rein in data center growth this year in the General Assembly, but most legislation failed to pass.
As part of Monday's filing, Dominion proposed a new rate class for high-energy users like data centers, which would 'ensure these customers continue to pay the full cost of their service and other customers are protected from stranded costs.' Under the proposal, high-energy users would be required to make a 14-year commitment to pay for their requested power, even in cases where they may use less.
An SCC public hearing on Dominion's IRP is slated for April 14. The public can submit written comments on the plan through April 8 by visiting scc.virginia.gov/casecomments/Submit-Public-Comments.
Baine said in a statement after the IRP's release that the provider needed to take an 'all-of-the-above' approach to energy production, including about 3,400 megawatts of offshore wind in addition to the Coastal Virginia Offshore Wind Project, a large-scale project that began construction off the coast of Virginia Beach. The plan detailed more solar power, about 12,000 megawatts, and 'small modular nuclear reactors' in the 2030s. About 20% of the plan's incremental power generation will come from natural gas.
As for rates, the plan also included a projected bill analysis that showed a steep increase in what customers pay over the next decade. For a household using 1,000 kilowatt-hours per month, a Virginia resident paid about $143, the IRP states. When taking to account load growth over the next 15-20 years, the same household would pay $215.62 at the end of 2035 and $214.24 by the end of 2039. For North Carolina residents, bills would go from about $128 at the end of this year to $204 by 2039.
'We know our customers are feeling the impact of inflation in other areas of their lives, and some of our customers may need assistance with their power bills,' Baine said, noting Dominion's EnergyShare program could provide relief for customers that qualify.
The program, which is not based on income, reviews applications for bill assistance on a case-by-case basis for households in crisis. Heating assistance is up to $600 from Oct. 1 to May 31 and cooling assistance up to $300 from June 1 to Sept. 30. Customers who receive EnergyShare bill payment assistance can receive a free home energy assessment, and the installation of some energy-saving upgrades come with no cost. Some of these include LED light installation, insulation or a tune-up for heat pumps.
Dominion reported that more than 12,600 customers were connected to the EnergyShare program from 2023 to 2024.
Eliza Noe, [e-mail]