On October 18, 2021, Dominion Energy Virginia, the state’s largest electric utility, announced that it had reached a tentative settlement agreement in its pending base rate case with staff at the Virginia State Corporation Commission (SCC), the Office of the Attorney General, and other parties[1].[2] The SCC staff and the state attorney general had alleged that the utility had garnered nearly $1 billion in excess profits between 2017 and 2020. The allegations spurred regulators to start a rate review in March 2021 to examine Dominion’s earnings over the last four years and whether adjustments to customers' base rates are necessary.
Under the proposed agreement, Dominion’s customers will receive a total of $330 million in one-time refunds and a $50 million rate reduction. The one-time refunds would be made up of $255 million over a six-month period and $75 million over three years, which would equal a refund of about $67 for a typical residential customer. According to Dominion, the $50 million rate reduction is the maximum amount permitted by law under the 2018 Grid Transformation and Security Act and would result in a proposed monthly bill reduction of about $0.90 for each residential customer. The settlement agreement also includes the use of $309 million in revenue to offset the costs of developing the Coastal Virginia Offshore Wind pilot project, the deployment of smart meters, and a customer information platform. If approved by the SCC, Dominion would also receive a higher return for its shareholders, rising from the current 9.2% rate to a 9.35% return on equity.
[1] The settlement agreement is also joined by the Apartment and Office Building Association of Metropolitan Washington, Costco, Direct Energy, Department of the Navy on behalf of the Federal Executive Agencies, Kroger and Harris Teeter, Virginia Committee for Fair Utility Rates, and Walmart
[2] https://news.dominionenergy.com/2021-10-18-Dominion-Energy-Virginia,-State-Corporation-Commission-Staff,-Office-of-Attorney-General,-and-Other-Parties-File-Comprehensive-Rate-Settlement-Agreement-That-Provides-Significant-Customer-Benefits