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Business, consumer groups back power rate hike

Several business, government and consumer groups that would be affected by Dominion Virginia Power’s proposed 18 percent rate increase endorsed the request at a State Corporation Commission hearing last week.

The state’s largest utility is seeking the $1.3 billion annual increase to recover soaring fuel costs.

“This increase is significant, and the company recognizes it’s significant,’’ Dominion attorney Ed Flippen told the three-member SCC, which is expected to issue a decision by July 1 – the day Dominion wants the new rates to take effect.

Among those going along with the request were large industries, federal agencies, apartment complex owners and – representing Virginia consumers – the Virginia attorney general’s office. Representatives of those customer groups noted that Dominion proposes deferring about $697 million in fuel costs to lessen the rate shock.

Without the deferral, company officials said, the rate increase would be more than 22 percent.

“This will mitigate to some degree what otherwise would have been a bigger increase,’’ said Meade Browder of the attorney general’s office.

Although the deferral would limit the rate increase, it means Dominion would have to return to the SCC next year for approval to recover the remainder of the costs. Commissioner Ted Morrison said he was concerned that new customers in the future would wind up paying fuel costs incurred by existing ones.

“It’s another form of borrowing,’’ Morrison said.

Glenn Richardson of the SCC staff also reminded the commission that the remainder of the increased fuel costs would have to be recovered eventually.

“We’re just putting off the financial pain until next year,’’ he said.

The proposed increase would boost the average customer’s monthly bill from $90.59 to $107.20. Dominion considers an average customer one who uses 1,000 kilowatts of electricity a month, but Morrison told a company executive, “I haven’t been at 1,000 in a long time, and I bet you haven’t either.’’

The Rev. Makeba D’Abreu of Chesterfield County told the commissioners she could understand Dominion’s need to recover its fuel costs, but she was concerned about paying more for what she considers unsatisfactory service. She said she endured four multi-day power outages last winter.

Mark McGettrick, president and CEO of Dominion Generation, said the utility has seen price increases of 95 percent for coal, 55 percent for oil and 20 percent for natural gas.

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