Expiring credits to raise Dominion Virginia Power rates 4.6 percent
- December 29, 2010
Dominion Virginia Power rates will rise about 4.6 percent in January as $268 million in customer credits expire on Dec. 31.
News of the rate increase was included in a January letter to customers by Paul D. Koonce, the utility’s president and CEO, which also included plans for $7.6 billion in capital spending over the next five years.
A graph accompanying Koonce’s letter said that a typical monthly bill for a family using 1,000 kilowatt hours will be $102.86 under the higher rates. By comparison, the East Coast monthly average for the same energy consumption is $144.36 and the national average is $121.19, according to figures from the Edison Electric Institute.
All rate changes are subject to approval by the State Corporation Commission.
“Even with these changes, our rates will remain well below the national average and more than 28 percent below the average for East Coast utilities,” Koonce said in his letter.
Dominion Virginia Power customers had been receiving credits on their bills since April, the company said.
The bulk of the letter dealt with the company’s investment plans through 2015. Koonce said Dominion Virginia Power will need to add 5,600 megawatts of new generating capacity to its system. That is equal to the amount of power needed to provide electricity to 1.4 million homes.
The company currently is the nation’s second-largest power importing state. “That puts us dangerously at the whim of future market fluctuations,” Koonce said.
The company plans to spend $4 billion of the $7.6 billion to upgrade and add new transmission and distribution lines, substations and other facilities.
The company’s strategy for meeting growing electricity demand, called Powering Virginia, includes a mix of generating sources, including natural gas. hybrid (coal and biomass), wind and solar power.
Natural-gas fired units are under construction in Buckingham County and a hybrid plant is 75 percent complete in Wise County.
Koonce said efficiency improvements at existing fossil-fuel and nuclear plants will increase their power output to meet demand for 172,000 more homes by 2014 without significant new emissions.