Dominion reveals plan to raise customer rates for the first time since acquiring SCE&G
Dominion Energy has followed through on its plan to raise customer power bills, filing a request for a 7.75% retail rate increase — the company’s first proposed rate hike since acquiring SCE&G last year following an unprecedented nuclear plant construction failure.
The Virginia energy giant said the typical customer will pay on average $9.68 more per month, or about $131.99 total, according to a company news release late Friday afternoon. Dominion said it needs the revenue to offset costs.
“Our customers count on us to keep the electricity flowing safely, reliably and efficiently,” said Rodney Blevins, president of Dominion Energy South Carolina. “It is an obligation we take seriously every day. An adjustment to rates is critical to our company’s ability to continue to meet this obligation and expectation.”
Friday’s filing — which comes as the coronavirus has put many South Carolina residents out of work — was expected. The company said in July it would raise rates, but did not say at the time how much the increase would be.
The 7.75% rate increase would affect customers in much of central and coastal South Carolina. The company serves the Columbia, Charleston, Aiken and Hilton Head Island areas.
Dominion acquired struggling SCE&G after the South Carolina company and its state-owned partner, Santee Cooper, walked away from the V.C. Summer nuclear construction project on July 31, 2017.
Soaring construction costs and delays contributed heavily to the decision, as did the bankruptcy of chief contractor Westinghouse, the companies said. When the companies quit the project, they had already spent $9 billion after hitting customers with multiple rate increases to fund the twin-reactor construction effort. It is considered by many to be the biggest construction failure in state history.
About 18% of the average SCE&G residential bill, or about $27 per month, was going to the nuclear project that would not be built. Since that time, some of the amount was cut, but customers are still expected to collectively pay billions of dollars.
Dominion’s rate increase is expected to draw opposition from watchdogs and public interest groups that have been critical of the company, SCE&G and the bungled nuclear project in Fairfield County.
The S.C. Office of Regulatory Staff, a watchdog agency that monitors plans by power companies to raise rates, could oppose the increase, which would not take effect until next year. The request before the state Public Service Commission starts what will be a months-long process to determine whether the rate increase is justified.
“This is the big reveal on what that long anticipated rate increase was going to look like,’’ regulatory staff spokesman Ron Aiken said. “This is just what they want. What they wind up with at the PSC is to be determined.’’
Aiken said the ORS won’t have a position until after it reviews the request over the next several weeks. Agency staff will begin examining the request early next week. The public will have a chance to comment on the proposed rate increase as well.
Dominion Energy serves more than 7 million customers in 20 states, including more than 700,000 in South Carolina.
According to Friday’s news release, the company wants to raise rates to offset $3.2 billion in investments made since the last rate increase in 2012.
Among the costs it wants to recover are $2.1 billion for expansion and improvement of the electrical transmission system. The company did not say if they were tied to the V.C. Summer project near Jenkinsville, about 25 miles northwest of Columbia. The company operates an existing plant at the nuclear site.
Other costs the company said it has incurred that justify the rate hike include:
▪ $878 million in upgrades and environmental controls for its electric generation stations.
▪ $198 million in technology and equipment to better serve its customers and enhance system security.
▪ Expenses from prior years
This story was originally published August 14, 2020 at 7:33 PM.
