Old Dominion Power and the staff of a state regulatory agency have proposed a compromise over the Southwest Virginia electric utility’s request to raise its rates.
The proposal would raise the bill of an average residential customer using 1,143 kilowatt-hours per month by $17.65, or 11.2%, to $175.53.
Under Old Dominion Power’s original application filed in April, that average bill would have increased by $21.52, or about $4 more than the proposed compromise amount.
The proposal also would keep the utility’s monthly basic service charge at $12 instead of increasing it to $15.
If approved, the new rates would take effect Feb. 1.
“I think it does represent a comprehensive, fair, just and reasonable outcome to this case,” Kendrick Riggs, an attorney representing Old Dominion Power, said of the proposal during a Wednesday hearing held by the State Corporation Commission, which regulates utilities in Virginia.
Old Dominion Power, a subsidiary of Kentucky Utilities, provides electric service to about 28,000 Virginia customers in Dickenson, Lee, Russell, Scott, and Wise counties. It’s the smallest investor-owned utility in Virginia.
Under the proposed compromise, Old Dominion Power would be permitted to earn an additional $8.3 million of revenue annually. It originally asked to be allowed to earn an additional $9.4 million annually.
The utility has said it needs to provide a fair rate of return to its shareholders while continuing to invest $1.85 billion in capital projects, including putting $349 million toward building a 621-megawatt natural gas plant in Louisville, Kentucky, and $129 million toward deploying advanced electricity meters in Virginia.
The proposed compromise came from Old Dominion Power and staff of the SCC. Before it can take effect, the commission itself must approve it.
At the SCC’s hearing on Wednesday, one member of the general public was signed up to speak but couldn’t be reached by phone after two attempts.
The case record has one comment from the public on file: The Dickenson County Board of Supervisors objected to the original increase request, saying it would have a “serious financial impact” on residents.
On April 1, Old Dominion Power reduced its fuel factor, largely due to lower natural gas price forecasts. That lowered the average residential customer’s monthly bill by about $10.
The State Corporation Commission is still considering whether to give its final approval to that reduction but allowed the utility to implement it in the meantime.
