Dominion Energy Virginia and Appalachian Power Co. must further reduce base electric rates to pass along savings from the corporate tax cut enacted at the end of 2017.
The Virginia State Corporation Commission ordered Dominion Energy Virginia, known legally as Virginia Electric and Power Co., to reduce base rates by about $182.6 million on April 1, while American Electric Power Co. Inc. utility Appalachian Power must implement an $80.1 million annual revenue reduction.
A 2018 Virginia state law required Dominion Energy Virginia to reduce its rates by $125 million and Appalachian Power to cut its rates by $50 million on an interim basis as the commission weighed the proper rate reductions tied to federal tax reform. The Tax Cuts and Jobs Act lowered the federal corporate income tax rate to 21% from 35% beginning in the 2018 tax year. The commission in January 2018 ordered the companies to preserve the savings from the corporate tax cut for the benefit of their customers.
Each company must provide a one-time credit to customers to account for the difference in rates between the Jan. 1, 2018, effective date of the corporate tax reduction and the last day of interim rates, the commission said in a news release.
Dominion Energy Virginia, a subsidiary of Dominion Energy Inc., must provide the one-time credit by July 1, while Appalachian Power must provide the one-time credit by Oct. 1.