Dominion asks for approval to reduce fuel charge

Published October 15, 2013 by Robert Powell, III

Dominion Virginia Power is asking the State Corporation Commission of Virginia (SCC) for approval to reduce its  fuel charge.

If approved, the lower fuel charge would lower the monthly bill of a typical residential customer using 1,000 kilowatt-hours of electricity by 3.3 percent, from $112.05 to $108.35, the company said.

The fuel charge pays for fuels including natural gas, coal and uranium used in power stations to produce electricity. The cost of fuel is charged on a dollar-for-dollar pass-through without any mark-up or profit to the company.

The company is requesting that more than $140 million be returned to customers as a result of the savings resulting from lower-than-expected fuel prices and mild weather.  Dominion Virginia Power spends nearly $2 billion annually on fuel and related expenses.

If the request is approved, Dominion’s overall electric rates will be reduced to virtually the same level they were more than five years ago, the company said. At that time,  portions of a 2007 law reregulating Virginia electric utilities went into effect.
The fuel charge comprises about 25 percent of a typical residential bill but substantially more for large industrial customers, meaning they could see significantly greater savings.  The remaining part of the bill covers operating and maintenance costs as well as investments in power stations, the transmission grid and other infrastructure to support reliable electric service for customers.

By state law, the company files a fuel case only once a year, normally around May 1. The fuel rate normally changes on July 1 each year.