Dominion Virginia Power Says It Will Not Seek Increase In Base Rates For At
Least Next Two Years
-- Efficiency improvements have kept company's base rates down for more than
-- Company not planning to seek higher rates to recover storm, earthquake
-- Other components of rates will continue to adjust periodically
RICHMOND, Va., March 28, 2013
RICHMOND, Va., March 28, 2013 /PRNewswire/ --Dominion Virginia Power today
proposed holding its base rates unchanged for at least another two years
despite encountering more than $450 million in costs in 2011 and 2012 related
to major storms, an earthquake and other factors.
Base rates make up about 60 percent of a typical residential bill and cover
the company's non-fuel operational costs, salaries and part of its earnings.
This part of the bill can only be adjusted every two years and has not
increased since 1992.
"Holding down our base rates over this 20-year plus period reflects our
continuing focus on operating as efficiently as possible," said Paul D.
Koonce, chief executive officer.
The total Dominion monthly bill for a typical residential customer who uses
1,000 kilowatt-hours is now $107.22 -- only two cents higher than it was in
July 2008. This same bill has gone up 25 percent since 1992, while fuel oil
has increased 325 percent, gasoline 198 percent and the average national
electricity rate 57 percent over the same period.
All changes in the company's electric rates must be approved by the Virginia
State Corporation Commission. The biennial filing made today, which is
required under state law, allows the SCC to review the company's base rates
for 2011 and 2012.
Other components of rates, including the cost of fuel for power stations,
energy conservation programs, transmission facilities and new power stations,
comprise the remaining 40 percent of a typical residential bill and are
adjusted periodically during the year.
For example, an increase of 98 cents, or 0.9 percent, on a typical 1,000
kilowatt-hour residential bill will go into effect in April to cover an
increase in the cost of four separate power projects. The company sought the
increases last June and they were approved earlier this month.
Over the past two years, the company experienced significantly higher costs
from damage primarily caused by Hurricane Irene in August 2011, the earthquake
that shutdown North Anna Power Station, and severe summer storms, including
the derecho in June 2012. The planned closing of six coal-fired generating
units because of new environmental regulations also caused impairments to
In spite of these challenges, Koonce said, the company made major
infrastructure investments, achieved superior generating unit performance,
improvements in reliability, faster storm response and overall enhanced
customer service. Over the next three years the company plans to invest
approximately $8 billion to continue infrastructure improvements and meet
ever-growing customer demand.
"At the end of the day, our public service obligation revolves around what I
like to call our three R's – Reliability, Responsiveness and Reasonable
rates," said Koonce. "This is what we focus on and it helps us keep rates down
even as we strive to improve service."
With the filing today and the non-base rate adjustments expected to occur over
the rest of the year, the company's electric rates would still be among the
lowest in Virginia and well below national and regional averages. Current
company projections place the impact of all other rate adjustments this year
at about 3 percent.
Dominion (NYSE: D) is one of the nation's largest producers and transporters
of energy, with a portfolio of approximately 27,500 megawatts of generation.
Dominion operates one of the nation's largest underground natural gas storage
systems and serves retail energy customers in 15 states. For more information
about Dominion, visit the company's website at www.dom.com.
Follow us on Twitter at: http://www.twitter.com/DomVAPower.
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SOURCE Dominion Virginia Power
Contact: Media: David Botkins, 804) 771-6115, David.B.Botkins@dom.com;
Analysts: Nathan J. Frost, (804) 819-2187, Nathan.J.Frost@dom.com
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