A State Corporation Commission analysis that says Dominion Energy's bid for a higher profit margin will boost ratepayers' bills does not reflect the effect of moving several surcharges into base rates, the energy company says.
It says moving those surcharges, called riders or rate adjustment charges, will effectively reduce a benchmark 1,000-kilowatt-hour monthly bill, now at $137, by $6 to $7.
In an analysis of Dominion's sweeping regulatory reform proposal, sponsored by Senate Majority Leader Dick Saslaw, D-Fairfax, the SCC's director of utility accounting and finance, Kimberly B. Pate, wrote that a higher profit rate allowed by the legislation would mean the utility company would collect $2 billion more from Virginia rate payers through 2040.
The bill - both its original form and the revised version, which passed the Senate Commerce and Labor Committee with a provision to limit the impact of a potential $17 boost of the 1,000 kilowatt-hour bill due to rising fuel prices - would clear the way for raising Dominion's profit rate from 9.35% to 10.07%.
In response to a question from Del. Lee Ware, R-Powhatan, and Del. Rip Sullivan, D-Fairfax, Pate said the bill's new approach to the profit rate would increase base rates, which currently constitute about half of customers' bills, by about 90 cents a month for the 1,000 kilowatt-hour bill.
She said the impact on the continuing riders would add another 85 cents a month, for a total impact of $1.75.
"The base rate and RAC [rate adjustment clause] breakdown above incorporates the proposed legislation's requirement to roll-in to base rates at least $300 million of annual RAC revenue," Pate wrote.
Dominion says Pate was responding to a question about base rates and the RACs, and that therefore her response did not cover the impact of the roll-in of those surcharges that will yield the $6 to $7 a month reduction.
The utility said it did not dispute her numbers, however.
The SCC declined to comment on the record about Dominion's interpretation.