Dominion Virginia Power seeks approval of power plant, transmission

The company asked the Virginia State Corporation Commission to approve the first fuel rate increase in three years

Richmond, Va., May 4, 2011 — Dominion Virginia Power asked its Virginia regulators to approve a new natural gas-fired power station and annual rate adjustments for transmission services and increased fuel costs.

The power station and transmission applications are part of Dominion's "Powering Virginia" strategy, which is designed to ensure continuation of reliable service to the company's 2.3 million Virginia electric customers while meeting demand growth of 4,500 MW by 2021.

The strategy includes adding a mix of new generation sources and energy efficiency programs, and upgrading and expanding the transmission and distribution network to minimize fuel expenses while improving reliability.

These actions also would reduce the amount of electricity imported from other states. The fuel rate application is an annual review and proposed adjustment.

The company asked the Virginia State Corporation Commission to approve the first fuel rate increase in three years. The fuel rate is a pass-through cost with no profit to Dominion.

This rate is adjusted annually to recover what Dominion Virginia Power spends on fuel at its nuclear, biomass, coal, natural gas and oil electricity-generating units as well as power it must purchase from the wholesale market.

Dominion is authorized to recover these expenses over a year's time but has proposed spreading the costs over the next two years to reduce the impact to customers.

If the SCC approves the two-year proposal, the total amount of the proposed increase for the 12-month period beginning July 1 would be about $319 million. The monthly bill of a residential customer who uses 1,000 kWh each month would increase by $4.86, from $103.91 to $108.77, beginning July 1.

If regulators decline the mitigation proposal in favor of full recovery over one year, the total amount of the increase for the 12-month period would be about $536 million. The monthly bill of a residential customer who uses 1,000 kWh each month would increase by $8.17, from $103.91 to $112.08, beginning July 1.

The commission was also asked to approve the annual rate adjustment for Dominion's transmission system. Projects include replacing aging equipment, adding new infrastructure, and covering the costs of services for the regional grid operator. If approved, the transmission portion of the monthly bill of a typical residential customer would increase by $3.84 per month, from $6.16 to $10, beginning Sept. 1.

The commission was also asked to approve the Warren County Power Station near Front Royal. Dominion is planning for the about $1.1 billion, more than 1,300-MW, natural gas-fired power station to begin operating in late 2014.

If approved, the monthly bill of a residential customer who uses 1,000 kWh each month would increase by $0.75, beginning April 1, 2012, to pay for the financing costs of the power station's construction for a 12-month period.

More in Transmission & Distribution