RICHMOND — The big bump in Dominion Energy bills that took effect on an interim basis in July will remain in effect through June 2023, the State Corporation Commission ruled.
That increase to monthly bills amounted to $14.93 — or 12.2% — for a typical residential customer using 1,000 kilowatt hours per month of electricity.
In the Lynchburg area, Dominion Energy serves about 9,500 customers, primarily in Appomattox and Campbell counties.
Called a fuel factor rider, the idea is to pass on, dollar-for-dollar, the cost Dominion incurs to buy natural gas and coal, as well as other fuels to run its generating stations, as well as power it buys from other generators.
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About 12% of the increase is meant to cover part of the $1 billion shortfall between what the utility collected from its fuel factor rider between July 2021 and June 2022. The rest is for its projections going forward for what fuel will cost.
Fuel prices soared during the past year, with natural gas prices doubling and coal rising 92%, but Dominion’s efforts to hedge against market price rises eased the impact, Gregory A. Workman, the company’s general manager for fuel, told the SCC.
Total fuel costs for its generating plants, which include its nuclear plants at Surry and North Anna producing about a third of its electricity, as well as a growing fleet of solar facilities, rose 37%, he said.
Dominion expects to add more solar facilities in the months to come, and to retire the remaining coal units at its Chesterfield Power Station and the oil-burning unit at its Yorktown plant next spring, he said.
The fuel factor increase does not recover all the shortfall from the previous year, since Dominion proposed and the SCC agreed to a plan to phase in recovery of that money over three years.
Dominion is waiving recovery of $27.5 million in financing costs it expects to incur by delaying recovery.
Still, the increase is a big one.
“We are sensitive to the effects of rate increases, especially in times like these,” the SCC said, in an unusual comment. “The Commission, however, must follow the laws applicable in this case … that is what we have done.”