RICHMOND, Va. — As Dominion proposes hiking its customers' bills by an average of $21 per month within the next two years, many customers have been reacting negatively to the news.
“My eggs are five bucks. I'm not going to be able to afford either eggs or my electric bill. Something's got to give," said Varina resident Tammy, who only wanted to use her first name.
While she said her family does a good job of budgeting, it would be impossible to avoid the impact of the type of increase Dominion wants her to pay.
“It's a lot of things that we're probably going to have to adjust in order to keep the lights on, so to speak," Tammy said. "Why suddenly now? It's like putting too much on our plates. The plate's going to actually break in a minute if you put anything else on."
Her comments were consistent with the majority of the feedback CBS 6 viewers have written online, calling the proposals "ridiculous" and questioning how necessary they are.
WATCH: Dominion Energy's proposed rate increases frustrate Virginians: 'Something's got to give'
The rate changes explained
The monopoly utility said the proposed rate charges are due to the increasing costs of labor, materials, and equipment as well as inflation and grid upgrades.
“Virginians are using about 5% more power every year, and so we have to make investments in the grid so that we can reliably serve our customers’ growing needs," said company spokesperson Aaron Ruby.
As presented, Ruby said the increases would be implemented in three different phases. Once all are complete, they would increase customers' bills by roughly 13%. For example, a household with a monthly bill of $140 would see a new monthly bill of $161.43.
The increases would impact the two most significant parts of customers' bills, with one being the fuel factor. The fuel factor covers the cost of generating and buying electricity, and the company said it does not earn a profit from that rate. The fuel factor rate would increase by about $10.92 monthly for a residential customer and would take effect in July of this year.
The other proposed change impacts the base rate, in which Dominion does earn a profit. These changes would be implemented in two stages: one monthly increase of $8.51 in 2026 and another monthly increase of $2.00 in 2027.
In filings submitted to the State Corporation Commission (SCC), which is the utility's regulator, Dominion said it has been "underearning" over the past two years. While the company could have earned a 9.7% return on equity, which is the company's allowable profit margin, it said it only received a 7.77% return on equity. Dominion said this resulted in about $350 million in unrecovered costs for the company.
Dominion attributed the "underearning" to higher capital investments than projected, the elimination of $350 million in rider fees in 2023 which saved customers about $6-$7 on their monthly bills, the inability to raise rates during its 2023 regulatory review, and fossil plant retirements.
It's important to note the SCC will ultimately have to sign off on any changes to rates.
WATCH: Dominion Energy proposes $21 in monthly rate increases for Virginia residents
Andy Farmer, a spokesperson for the SCC, said the commission will review Dominion's filings over the next several weeks to determine whether the company's application is just and reasonable and then will issue its own report. There will eventually be a public comment period as well, where members of the public and other interested parties will have a chance to weigh in.
A spokesperson for Attorney General Jason Miyares' Office, which represents consumers in these types of cases, said, "Consumer protection remains our top priority. We will be reviewing this filing carefully with the mission of keeping rates down and ensuring reliability for Virginia ratepayers."
In its filings, Dominion said it was "mindful of the economic pressures on customers" but that "many of the elements of the company’s cost of service" were beyond its control.
“What would you say, of course, to customers that are going to be feeling some of the impacts on the receiving end of this?” Layne asked Ruby.
"We know our customers are experiencing inflation with everything else that they buy, and we know that higher electric bills make that more challenging. There's a number of different ways that we can help. We offer some of the most supportive bill assistance programs of any utility in the country," Ruby said, adding those programs can be found on Dominion's website. "We are focused on delivering exceptional value for our customers every single day, and what that basically means is delivering reliable electricity to our customers every single day. Outside of major storms, we deliver on our uninterrupted power to our customers 99.9% of the time."
Ruby noted that this is the first time since 1991 that Dominion has requested a base rate increase.
While a 2024 SCC study showed that base rates have stayed relatively flat on customers' bills since 2007, customers' bills have seen a notable 47.6% increase mostly due to rider fees. Rider fees are what Dominion charges to pay for capital projects like offshore wind projects, solar projects, and biomass projects. There is a return on equity associated with these fees as well.
In justifying the rider fees, Ruby said, "We're building to reliably serve all the growth, and so we are significantly expanding clean energy in Virginia. We're building a lot of new grid infrastructure to reliably serve the growing needs of our customers, and so some of those riders are also increasing over time as well."
Tammy said her message to decision makers on the proposed rate increases is, “We want you to walk in our shoes just for a week and then make a decision. Have us all make it together, because we're all going to do it together, because everyone needs electricity.”
CBS 6 is committed to sharing community voices on this important topic. Email your thoughts to the CBS 6 Newsroom.
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