Dominion and the Office of the Attorney General of Virginia, Division of Consumer Counsel, Wal-Mart Stores East and Sam's East, Kroger, Chaparral (Virginia), MeadWestvaco, International Paper Company, and the Apartment & Office Building Association of Metropolitan Washington, have filed a stipulation and proposed recommendation for approval by the Virginia State Corporation Commission.
The parties represent a coalition of customers and consumer interests. The agreement, if approved, would resolve the pending proceeding to set base rates for Virginia jurisdictional customers of Dominion Virginia Power, as well as the Virginia fuel case proceeding, and the authorized return on equity for the rate adjustment clauses for the Bear Garden Power Station and the Virginia City Hybrid Energy Center.
Under the terms of the agreement, Dominion Virginia Power’s base rates would not change from the level that existed prior to the filing of the base case. The increase in base rates that was implemented on an interim basis on September 1 would be returned to customers. The company’s authorized return on equity applicable to its base rates would be set at 11.9%, with an earnings collar and sharing mechanism established by Virginia law.
Cost recovery for several of the company’s construction projects would be achieved through separate rate adjustment clauses approved by the commission. These include the Virginia City Hybrid Energy Center and Bear Garden Power Station. Under terms of the proposed settlement, the return on equity incorporated in the rate adjustment clauses for these two facilities would be set at 12.3%.
Under the terms of the agreement, the company would return $268m of 2008 earnings to customers through the end of 2010. The company would also credit $129m of prior-period Financial Transmission Rights (FTRs) and fuel expenses to customers. For customers who are not Virginia jurisdictional customers but have agreed to pay rates which are either approved by the Virginia Commission or are based on the same ratemaking methodology as approved by the commission, the proposed settlement would result in approximately $31m in total credits to these customers.
The proposed settlement, if approved, would result in savings of about $80 for a typical residential customer who uses 1,000 kilowatt-hours of electricity a month. This includes a one-time credit of approximately $24 and monthly bill adjustments totaling $56 through December 2010.
The monthly bill for a typical residential customer would be $103.83 if proposed energy conservation programs are approved by the commission. That would be a 4.5% reduction compared with a bill of $108.73 a month for the same customer in March 2009, when Dominion proposed a base rate increase and other rate adjustments.