Regulators approved Dominion Energy's plan to recover $1B in fuel costs

RICHMOND, Va. — Virginia ratepayers will help pay back $1 billion in unrecovered fuel costs under a bond plan approved by the State Corporation Commission on Tuesday, adding $10.23 to a typical Dominion Energy customer's monthly bill.

Instead of recovering those costs over a typical year, the SCC allowed Dominion to spread repayment over seven years. That breaks down to $7.97 per month for the fuel costs themselves, plus an additional $2.26 per month to cover financing — totaling $10.23 more each month for a typical customer.

Dominion said the securitization plan significantly reduced the impact on customers. Without it, the company said residential customers would have faced a monthly increase of nearly $22.

The SCC issued two orders — one approving the fuel factor rate that has been in effect on an interim basis since July 1, and another approving the securitization strategy. Dominion said it will submit semi-annual updates on the Deferred Fuel Cost Charge for SCC approval.

The company attributed the new fuel rate to rising costs. Dominion said the cost of purchased power went up nearly 30% over the last year, and natural gas prices increased by more than 15%.

The approval comes as ratepayers are still paying off a similar $1.27 billion bond request from 2023. Delegate Irene Shin noted the overlap during the rate case.

"My constituents are still paying off $1.27 billion, and they won't finish that until 2031," Shin said.

Carol Myers, an SCC staff witness, warned at a hearing that the pattern of billion-dollar fuel cost underrecoveries followed by bond requests is not sustainable.

"I think continuing down this path, it's dangerous and puts customers in a bad position," Myers said.

PREVIOUS COVERAGE: Virginia pushes back as Dominion Energy seeks another rate increase

Multiple witnesses testified during the rate case that weather, rising natural gas prices, and data center load growth are among the factors driving increased fuel costs being passed on to customers. Currently, Dominion has more demand for electricity than it can supply from its own generation, causing the company to purchase power from other suppliers.

In 2025, Dominion's forecasts of how much power it would need to purchase fell short by $1.26 billion.

Carew Bartley with the Attorney General's Office pointed to rapid growth as a key factor.

"The rapid addition of new large load customers seems to be a primary driver of the increased fuel and purchase power costs," Bartley said.

The SCC has also ordered Dominion to conduct a root cause analysis to help regulators understand what is causing the underrecovery and why Dominion's forecasts missed the mark. The SCC asked Dominion to present that information with its next fuel factor application.

CBS 6 is committed to sharing community voices on this important topic. Email your thoughts to the CBS 6 Newsroom.