Citing factors that include inflation and rising fuel costs, Dominion Energy is proposing rate and fuel increases that would raise the average residential bill 15% over the next two years.
Virginia’s largest electric utility said Tuesday that it wants to raise monthly base electric rates for the average customer by $8.51 in 2026 and $2 in 2027.
It also plans to raise the monthly fuel rate for an average customer by $10.92, effective July 1.
The bottom line is that if state regulators approve all of Dominion’s requests, the average residential monthly bill will increase 15.3% from $140 today to $161.43 after Jan. 1, 2027.
“We’re focused on providing exceptional value for our customers every single day,” Ed Baine, Dominion’s president of utility operations and Dominion Energy Virginia, said in a news release. “Outside of major storms, we deliver uninterrupted power 99.9% of the time, and we’re significantly reducing storm-related outages as well. This proposal allows us to continue investing in reliability and to serve our customers’ growing needs.”
[Disclosure: Dominion is one of our donors, but donors have no say in news decisions; see our policy.]
The State Corporation Commission regulates utilities in Virginia and will have the final say in whether Dominion’s requests are approved or denied.
Dominion said that the base rate increase would be its first since 1992. According to a Nov. 1, 2024, SCC report that looks at rates going back to 2007, the utility’s base rates have stayed relatively flat, but bills have increased largely due to rate adjustment clauses, which utilities use to recover the costs of transmission, generation, energy-efficiency programs and other expenses.
Before its request this week, Dominion last filed a rate case with the SCC in 2022. That case concluded in 2023 with a settlement that kept base rates the same and provided for $15 million in one-time credits to customers.
In 2021, Dominion agreed to refund $330 million to customers as part of a settlement that stemmed from a review of its rates between 2017 and 2020.
In 2015, Dominion was ordered to refund $19.7 million to customers based on a review that found customers paid too much in 2013 and 2014.
On Tuesday, Dominion said its latest request is a result of “significant inflationary pressure” since 2023, when its last rate case concluded.
The utility said that labor and materials costs are rising and it needs more revenue to “reliably serve a growing customer base.”
The fuel increase would come from shifting certain demand-related costs from the base rate to the fuel rate to make base rates more stable, along with higher fuel costs tied to January’s cold weather, future price forecasts and the expiration of a $3.99 fuel credit, Dominion said. The company said it does not earn a profit on fuel.
Dominion also proposes a new rate class for data centers and other customers that use high amounts of energy. The new class would require a 14-year commitment from such customers, even if they end up using less energy, and would ensure that they pay the full cost of their service, Dominion said.
Richmond-based Dominion Energy has more than 3.6 million customers in Virginia, North Carolina and South Carolina. Of those, more than 2.5 million are in Virginia, including in Central and Southside Virginia and the Alleghany Highlands.