Dominion Energy Virginia, the Virginia State Corporation Commission (SCC) Staff, the Office of the Attorney General, and other parties recently filed a comprehensive settlement agreement in the Company’s pending triennial base rate case. If approved by the SCC, the agreement would resolve the ongoing review of the company’s performance over the past four years as well as provide significant additional customer benefits.
In addition to the SCC Staff and Office of the Attorney General, the agreement is joined by Apartment and Office Building Association of Metropolitan Washington, Costco, Direct Energy, Kroger and Harris Teeter, Virginia Committee for Fair Utility Rates, and Walmart. None of the remaining nine parties to the proceeding are opposed to the agreement. Key components of the settlement would provide the following customer benefits:
- A total of $330 million in one-time refunds on customer bills made up of $255 million over a 6-month period and $75 million over three years, resulting in a total proposed refund of approximately $67 for a typical residential customer.
- Use of $309 million in revenue to offset costs of the Coastal Virginia Offshore Wind pilot project, deployment of smart meters and a Customer Information Platform, as part of the Customer Credit Reinvestment Offset (CCRO) mechanism defined by Virginia law.
- A $50 million going-forward rate reduction, resulting in a proposed monthly bill reduction of approximately 90 cents for a typical residential customer.
The proposed settlement also supports:
- An authorized return on common equity of 9.35%.
- A capital structure with an equity ratio of 51.917%.
- Amortization through 2023 of the early retirement charges for fossil-generation units recorded in 2019 and 2020.
Total rates for Dominion Energy Virginia’s typical residential customer are currently more than 15 percent below the national average, almost 30 percent lower than the mid-Atlantic average and 35 percent lower than the average of states that, like Virginia, have joined the Regional Greenhouse Gas Initiative.
The settlement agreement provides a balanced and cost-effective approach that supports continued capital investments in Virginia in order to meet the Commonwealth’s public policy priorities and the needs of Dominion Energy customers. Those investments include the development of the Coastal Virginia Offshore Wind project—the largest on this side of the Atlantic—as well as growing one of the leading state-regulated utility solar portfolios in the country. These, along with other investments including nuclear relicensing, energy storage and grid modernization, put Dominion well on its way to reaching 100% clean energy by 2045 in Virginia and net zero emissions by 2050 across Dominion Energy’s nationwide footprint.
The settlement agreement aligns with the customer-focused, state-regulated utility framework in Virginia. That framework has resulted in nationally leading decarbonization goals, customer rates lower than national and regional averages, and high levels of reliability for customers, made possible by a state regulatory model that embraces long-term planning and resiliency safeguards.
“I appreciate the thoughtful effort of all parties in reaching an agreement that puts our customers’ interests first,” said Ed Baine, president of Dominion Energy Virginia. “We have a lot of work ahead as we continue to build a clean energy future in Virginia. 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.”