Dominion Energy Virginia, staff of the Virginia State Corporation Commission, the Virginia Office of the Attorney General and other parties on Oct. 18 filed a comprehensive settlement agreement on the Dominion Energy Inc. subsidiary's pending triennial base rate case.
The proposed settlement agreement, whose parties also include the Apartment and Office Building Association of Metropolitan Washington, Costco Wholesale Corp., Direct Energy, Kroger and Harris Teeter, the Virginia Committee for Fair Utility Rates and Walmart Inc., would provide significant customer benefits pending approval by the Virginia State Corporation Commission, the company, known legally as Virginia Electric and Power Co., said in a news release. None of the nine remaining parties to the proposed settlement are opposed to the agreement, Dominion said.
Dominion submitted the rate plan March 31, saying at the time that it would not seek an increase.
Benefits include $330 million in one-time refunds on customer bills, comprising $255 million over six months and $75 million over three years, resulting in a total proposed refund of approximately $67 for the typical residential customer. The agreement also stipulates the use of $309 million in revenue to offset the cost of the 12-MW Coastal Virginia Offshore Wind pilot project in Virginia Beach County, Va., the deployment of smart meters and a customer information platform as part of the Customer Credit Reinvestment Offset mechanism defined by Virginia law.
The settlement will also include a $50 million going-forward rate reduction that would result in a proposed monthly bill reduction of approximately 90 cents for the typical residential customer. The company said total rates for its typical residential customer are more than 15% below the national average, almost 30% lower than the mid-Atlantic average and 35% lower than the average of the states that have joined the Regional Greenhouse Gas Initiative. Virginia joined the RGGI, a multistate carbon cap-and-trade initiative designed to reduce emissions from power plants, in 2020.
The agreement also supports an authorized return on common equity of 9.35%, a capital structure with an equity ratio of 51.917% and amortization through 2023 of the early retirement charges for fossil-generation units recorded in 2019 and 2020, the release said. Dominion had initially requested a 10.8% return on equity. Its current authorized rate is 9.2%.
"This settlement enables us to continue to keep rates affordable while creating new jobs through the development of offshore wind, solar and energy storage expansion, transformation of the grid and energy-efficiency enhancements," Dominion Energy Virginia President Ed Baine said in a statement.
In mid-September, Dominion Energy Virginia filed a proposal with the Virginia State Corporation Commission to own, build and operate a 734.6-MW portfolio comprising 11 utility-scale projects, two small-scale distributed solar projects, one combined solar and storage project, and one stand-alone energy storage project in the state. The proposal includes power purchase agreements from 32 solar and energy storage projects operated by third-party providers.
