Crediting a new state law, Dominion Virginia Power said Feb. 27 that residential customers can expect to see an overall reduction of 5.5% in electric rates beginning in April.
“This is good news for family budgets and Virginia businesses,” said Robert M. Blue, president of Dominion Virginia Power. “With the passage of Senate Bill 1349, sponsored by Sen. Frank Wagner of Virginia Beach and signed into law by Gov. Terry McAuliffe on Tuesday, our customers will receive immediate savings beginning with their April bills.”
The bulk of the reduction stems from the new state law that gives consumers the benefits of lower fuel costs immediately and protects them from potential price spikes related to federal mandates to reduce carbon emissions. In a fuel filing made Feb. 27, Dominion asked the Virginia State Corporation Commission to approve a reduction related to fuel costs beginning April 1 rather than waiting until July 1. This will result in a $6.12 per month reduction in the typical residential bill for a customer who uses 1,000 kilowatt hours of power. Commercial and industrial customers could realize a savings of 7% and 10%, respectively.
Also scheduled to take effect April 1 is an additional decrease of 28 cents to a typical monthly residential bill that reflects reductions in generation construction costs associated with the gas-fired Bear Garden and Warren County power stations, the coal-fired Virginia City Hybrid Energy Center and the conversion of three former coal plants to biomass. These reductions are related to filings made last year. With these additional reductions, the typical residential monthly bill would decline a total of 5.5% from $115.95 per month to $109.55 per month, making rates 18.8% below the national average of $134.90.
The company noted that one reason for the lower fuel costs is the recent construction of highly efficient natural gas-fired power stations. Bear Garden Power Station, a gas-fired, combined cycle facility in Buckingham County, went into commercial operation in May 2011. Warren County Power Station, a larger facility, entered into commercial operation in December 2014. Another gas-fired combined cycle facility in Brunswick County is expected to go into commercial operation in May 2016.
Under SB 1349, base rates will be frozen through 2019 to protect customers from certain costs the company may incur to comply with stricter federal regulations on carbon emissions, as well as any costs to make repairs and restore service after a major storm or other severe event.
Dominion Virginia Power parent Dominion Resources (NYSE: D) is one of the nation’s largest producers and transporters of energy, with a portfolio of approximately 24,600 MW of generation, 12,400 miles of natural gas transmission, gathering and storage pipeline, and 6,455 miles of electric transmission lines.