Keith Mack
Dominion Energy is a regulated utility, meaning it cannot raise or lower rates without following a specific public process. The company calculates rates based on several factors, including the cost of generating electricity, maintaining power lines and infrastructure, and delivering electricity to customers. In July 2023, Dominion Energy lowered its rates for residential and non-residential customers in Virginia, resulting in savings of around $14 on the average monthly bill. This rate reduction was made possible by a law passed earlier that year, which eliminated about $7 in monthly charges and allowed the company to spread fuel costs over several years, reducing expenses by an additional $7. While this provided much-needed relief to customers, it is important to note that Dominion Energy's rates have been criticized for being artificially inflated due to the company's monopoly power and influence over state legislators.
| Characteristics | Values |
|---|---|
| Reason for the reduction in rates | Due to a law passed by Virginia legislators earlier in the year |
| Reduction in rates for residential customers | $14 a month |
| Reduction in rates for non-residential customers | Not mentioned |
| Total reduction in rates | $7 in monthly charges |
| Other benefits of the law | Allowed the company to seek regulatory approval to spread fuel costs over several years, taking the costs down an additional $7 |
| Current status of the plan | Awaiting approval from the Virginia State Corporation Commission |
| Residential rates compared to the national average | 20% lower |
| Residential rates compared to the East Coast regional average | 39% lower |
| Factors that determine the rates | Cost of generating electricity, maintaining power lines and infrastructure, delivering electricity to customers, and demand for electricity during peak hours |
| Suggested ways to lower rates | Upgrading to energy-efficient appliances, shifting usage patterns to off-peak hours, adjusting temperature settings, and generating your own renewable energy |
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What You'll Learn
- Dominion Energy rates are set to recover the costs of delivering electricity
- Dominion Energy is a regulated utility and must justify rate changes
- Dominion Energy offers time-of-use pricing plans to help customers save money
- Dominion Energy rates are lowered by $14 for residential customers
- Dominion Energy SC customers face increased power rates
Dominion Energy rates are set to recover the costs of delivering electricity
Dominion Energy, a regulated utility, has stated that its rates are set to recover the costs of delivering electricity to its customers. The company is required to follow a specific public process when requesting rate changes and must prove that any rate change is justified before it can be approved by the Virginia State Corporation Commission (SCC). The SCC then sets rates that it believes will best serve the public interest while allowing Dominion Energy to operate sustainably and provide fair returns for shareholders.
Dominion Energy's rates are influenced by factors such as rate class, energy use, fuel costs, and seasonal variations. The company also incurs charges for electricity transmission from its power plants to substations and fuel costs associated with electricity production, including transportation. These costs are passed on to the consumers. Additionally, Dominion Energy collects and remits a consumption tax for all kWh delivered and billed.
To cover these costs, Dominion Energy applies riders to certain rate schedules. Riders are additional charges that help recover costs related to their electric operations and electricity production. For example, Fuel Charge Rider A increases the price of electricity by a few cents per kilowatt-hour.
Dominion Energy has proposed rate hikes in recent years, citing inflationary pressures, increased labour, materials, and equipment costs, and investments in grid upgrades to meet growing customer demand. These rate hikes, if approved, could result in residential customers paying 15% more over the next two years.
While Dominion Energy attributes these rate hikes to various factors, there have been criticisms of the company's influence over state legislators and the lack of market forces to drive down costs. Some have called for regulatory reforms to keep energy rates as low as possible and increase consumer choice.
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Dominion Energy is a regulated utility and must justify rate changes
Dominion Energy's rates are set to recover the cost of delivering electricity to its customers and to support projects that will meet the ever-growing demand for energy. Factors like rate class, energy use, fuel costs, and the season all play a role in determining the rate that customers pay. Riders are charges applied to certain rate schedules to recover various costs associated with Dominion Energy's electric operations and electricity production. For example, Fuel Charge Rider A applies to a number of filed rate schedules and increases the price of electricity by a few cents per kilowatt-hour.
Dominion Energy has proposed hiking its customers' bills by an average of $21 per month within the next two years, which has received negative feedback from customers. The company has justified the proposed rate increases by citing the need to invest in the grid to keep up with the increasing demand for power. Dominion Energy also mentioned the impact of rising costs of labor, materials, equipment, and inflation. The proposed changes would impact the base rate, where Dominion earns a profit, and the fuel factor, one of the two most significant parts of customers' bills.
Dominion Energy's previous rate changes have also been a source of concern for customers. In 2015, the Virginia General Assembly froze rates at artificially high levels and prevented the SCC from lowering rates or mandating refunds in cases of overcharging. This resulted in higher energy bills for Virginians, and Clean Virginia has advocated for repealing the "Dominion Tax" to lower energy bills and improve environmental outcomes. Dominion Energy's proposed rate increases in 2025 have also been met with customer concerns about affordability and the timing of the changes.
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$32.45
Dominion Energy offers time-of-use pricing plans to help customers save money
Dominion Energy is not lowering its rates due to tax laws. In fact, over the past two decades, the Virginia General Assembly has passed laws that have kept electric rates at artificially high levels. Dominion Energy, as a regulated utility, cannot raise or lower rates without approval from the Virginia State Corporation Commission (SCC).
Dominion Energy has, however, proposed a time-of-use pricing plan to help customers save money. This plan is a voluntary program for customers with smart meters in Virginia. It offers customers greater control over their bills by allowing them to shift their energy usage to more affordable, off-peak hours. The Off-Peak Plan divides the day into three tiers: Super Off-Peak, Off-Peak, and On-Peak hours, with Super Off-Peak hours being the most affordable. By enrolling in this plan, customers can save money on their monthly bills by shifting their energy usage away from On-Peak hours. Dominion Energy also provides monthly emails advising customers on how to shift their usage and understand their bills to conserve energy and save money.
The time-of-use pricing plan has the potential to benefit both consumers and the environment. During off-peak hours, Dominion Energy sources a large portion of its power from nuclear energy, resulting in less carbon dioxide in the environment. By encouraging consumers to use energy during off-peak hours, the plan can help spread energy usage more evenly across the day, reducing peak demand.
Dominion Energy's time-of-use pricing plan is currently being offered as a pilot program, and the company is accepting feedback from participants. The plan provides an opportunity for customers to save money by changing their behavior or using advanced technology, such as EV charging, smart thermostats, and battery storage. Customers who go solar after signing up for the plan are also eligible for a one-time $500 incentive payment.
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Dominion Energy rates are lowered by $14 for residential customers
Dominion Energy is lowering its rates by approximately $14 a month for typical residential customers, with lower rates also going into effect for non-residential customers. This change came into effect starting from July 1, 2023.
The rate reduction was made possible by bipartisan legislation passed in the 2023 Virginia General Assembly, which eliminated about $7 in monthly charges. The law also allowed Dominion Energy to seek regulatory approval to spread fuel costs over a multi-year period, which further lowered the monthly fuel charge by $7. This reduction in fuel charge will remain on an interim basis, pending Virginia State Corporation Commission (SCC) approval of the company's long-term fuel securitization proposal.
Dominion Energy's residential rates have remained stable over the last 15 years and are now 20% below the national average and 39% below the East Coast regional average. The company's president, Ed Baine, has stated that this reduction is part of their mission to deliver "reliable, affordable, and increasingly clean energy" to their customers.
Dominion Energy, as a regulated utility, cannot raise or change rates without following a specific public process and receiving approval from the Virginia State Corporation Commission. The SCC carefully reviews requests for rate adjustments and sets rates that serve the public interest while enabling the company to run a healthy business.
This rate reduction by Dominion Energy will provide immediate relief for its customers, especially in the context of rising prices for goods and services. It also aligns with the company's commitment to expanding the use of renewable resources and helping customers save money through unique programs.
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Dominion Energy SC customers face increased power rates
Dominion Energy South Carolina customers are facing increased power rates due to a variety of factors, including the cost of generating electricity, maintaining power lines and infrastructure, and delivering electricity to customers. The rates also take into account the demand for electricity during peak hours, with rates tending to increase during these times. Additionally, Dominion Energy is legally allowed to leverage revenue from its captive consumer base to pressure the Virginia legislature to change laws rather than give consumers refunds or lower energy rates. This has resulted in artificially inflated rates that are not reviewed for several years.
One of the main factors contributing to the increased power rates for Dominion Energy SC customers is the cost of electricity generation and delivery. Dominion Energy incurs costs for fuel used in production and for transmission infrastructure to move electricity from its power plants to substations. These costs are then passed on to consumers in the form of fuel charges and transmission charges. The company also includes various surcharges and taxes in the total charges, such as the Sale and Use Surcharge, State/Local Consumption Tax, and Utility Tax.
Dominion Energy's rates are also influenced by the demand for electricity. During peak hours when demand is high, the rates tend to increase. This is particularly notable during the summer months when people across the country deal with hot temperatures and require more energy for cooling. Dominion Energy offers time-of-use pricing plans that provide customers with lower rates during specific times of the day when demand is lower. Customers can take advantage of these reduced rates by adjusting their energy consumption to off-peak hours, such as running appliances in the evening.
In addition to the direct costs of electricity generation and demand, Dominion Energy's rates are impacted by the company's financial practices and market conditions. Dominion Energy, as a regulated utility, is required to follow a specific public process when requesting rate changes. They must prove that the rate change is justified before it can be approved by the Virginia State Corporation Commission (SCC). However, critics argue that Dominion Energy has successfully lobbied the Virginia legislature to change laws in their favor, resulting in rates being frozen at high levels and normal oversight being curtailed. This has led to concerns about excess profits and the creation of terms like the “Dominion Tax” to describe the amount consumers are forced to pay beyond the corporation's reasonable allowed profit.
To address the increased power rates, Dominion Energy SC customers can implement strategies to lower their energy rates and save money. This includes upgrading to energy-efficient appliances, generating their own renewable energy through solar panels, and adjusting temperature settings to avoid unnecessary energy consumption. Additionally, customers can take advantage of Dominion Energy's time-of-use pricing plans and shift their energy usage to off-peak hours to benefit from lower rates. By making these changes, customers can reduce their overall energy consumption and subsequently lower their monthly bills.
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Frequently asked questions
Dominion Energy has lowered its rates for residential and non-residential customers in Virginia, with rates being 20% below the national average. This was due to a 2023 law that allowed the company to seek regulatory approval to spread fuel costs over several years.
Dominion Energy calculates rates based on factors such as the cost of generating electricity, maintaining power lines and infrastructure, and delivering electricity to customers. The demand for electricity during peak hours also influences rates.
The Dominion Tax refers to excess profits beyond the normal, reasonable rate of return approved by the SCC (State Corporation Commission). It is a result of an abuse of state-sanctioned market control and outdated regulatory structures.
Customers can lower their Dominion Energy rates by reducing their overall energy consumption, such as upgrading to energy-efficient appliances or adjusting temperature settings. Dominion Energy also offers time-of-use pricing plans, providing lower rates during off-peak hours.
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