The State Corporation Commission (SCC) has found that Dominion Virginia Power had earnings above its legal limit during 2013 and 2014 and ordered the company to refund $19.7 million to customers. The findings were made as part of the SCC’s regular biennial review of Dominion’s earnings. Under legislation enacted in 2015, such proceedings are suspended until 2022.
As a whole, the Commission made numerous findings which “are reasonable for purposes of determining the utility’s earned return in this biennial review.” As a result of those decisions, a Commission majority concluded that:
- Dominion Virginia Power earned, on average, a return on equity of approximately 10.89 percent on its generation and distribution services. The authorized rate of return is 10 percent, but the company, by law, is permitted to keep additional earnings up to 10.7 percent. Thus, the company retains approximately $103.9 million of the excess earnings above 10 percent.
- By law, the company is permitted to keep 30 percent of the excess earnings above 10.7 percent which is approximately $8.5 million.
- By law, the remaining 70 percent, or $19.7 million, is credited to customers’ bills.
The refund will come in the form of a rate credit shown on bills spread over a period of six months. For a typical residential customer using an average of 1,000 kilowatt-hours of electricity per month, the total refund will range between $4 and $5 based on each customer’s usage during years 2013 and 2014. The credit will appear on bills beginning no later than the February 2016 billing cycle.
A Commission majority also determined that, unlike prior financial reviews, under the 2015 legislation the Commission cannot now determine the fair rate of return that will be used for the purposes of the company’s next biennial review in 2022. The new law states that the return on equity for Dominion’s next biennial review will be determined in a proceeding in 2019.
Commissioner Dimitri concurred in part and dissented in part.