As electric bills rise due to fuel costs, advocates call for reforms in Virginia

RICHMOND, Va. (WRIC) — Dominion Energy is raising monthly bills in response to rising fuel prices, and Appalachian Power is implementing a similar rate hike.

Utilities say they are taking steps to soften the blow, but some advocates say customers in Virginia still bear too much of a burden because of the state’s current law.

When the price of fuel fluctuates, state law allows According to State Corporation Commission (SCC) spokesman Andy Farmer, utilities must pass those costs on to customers in full as long as regulators deem them “fair and reasonable.”

The average Dominion Energy Virginia customer who uses 1,000 kilowatt-hours of electricity per month can expect to see a $14.93 increase in their bills, according to an SCC news release. The increase in fuel tariffs was tentatively set to take effect on July 1, 2022, but the KDC officially approved it last week. Regulators are expected to review the rate in July 2023.

Craig Carper, a spokesman for Dominion, said the increase is the result of higher costs for the coal, natural gas and oil that utilities buy to generate electricity.

“It’s inflation, it’s the war in Ukraine and problems with supply chains. All of these things affect the price we pay for fuel and pass it on to customers,” Carper said. “We looked hard at other areas where we could save customers money at the same time to do it a little bit less. So while the fuel charge went up by about $15, we were able to cut about $6 off the remaining bill.”

Last week, Appalachian Power filed for a similar increase, which is expected to increase monthly bills for typical residential customers by $20. It will go into effect temporarily on Nov. 1, 2022, and if approved by the SCC, the rate will remain in place until at least November 2023, according to Appalachian State spokeswoman Theresa Hamilton Hall.

Hall called it the largest proposed increase in fuel rates from Appalachian Power in at least a decade.

“We recognize that these are challenging financial times for many individuals and families,” said Chris Beam, Appalachian Power president and chief operating officer. “Every day we strive to keep the cost of fuel as low as possible by constantly monitoring the energy markets for opportunities to purchase fuel and energy at prices that benefit customers.”

To reduce the impact on customers, Dominion Energy will spread coverage of the additional fuel costs over three years, while Appalachian Power proposes to do so over two years.

But advocates argue that many low-income customers are already paying more than they can afford.

U a recent articleKendall Kobbervig, manager of advocacy and organizing for Clean Virginia, and Kidest Gebre, energy justice organizer at Virginia Interfaith Power and Light, said state law protects utilities from paying the price for rising costs resulting from “overreliance on fossil fuels.”

“Because regulators are powerless to prevent a utility from passing on fuel costs to customers, Dominion has no incentive to make cost-saving investments, minimize fuel use, or convert to renewable energy,” Kobervig and Gebre wrote. “Now that fossil fuel prices are skyrocketing amid global turmoil, the utility is only adding to the energy burden, forcing Virginians to shoulder those costs while leaving their profits, executive pay and shareholder dividends intact.”

In an interview Tuesday, Gebre said several other states have held utilities accountable by requiring companies to share fuel costs with customers. She said Virginia should do the same.

“It would encourage more customer-oriented utility performance and a quick and affordable transition to renewable energy because it would give our utilities a game edge,” Gebre said.

In a press release, Appalachian Power noted that incorporating more renewable sources into the company’s energy balance is another step in reducing customers’ fuel costs.

Virginia’s Democratic-led Clean Economy Act calls for 100% carbon-free electricity generation by 2050.

Gebre, meanwhile, hopes that Gov. Glenn Youngkin’s administration will focus on risk-sharing reform rather than withdrawing from the regional greenhouse gas initiative. She said it would have a much bigger impact on electricity bills.

In his statement, Youngkin did not directly comment on calls for cost-sharing reform, but he doubled down on Virginia’s removal from the RGGI, an intergovernmental pact to reduce carbon emissions.

“Hard-working Virginians are having to do more with less as inflation steals a historic amount from their paychecks and the Biden administration’s failed energy policies cost Virginians more at the pump and in their homes. We must work to reverse the regressive impact of policies – such as the RGGI carbon tax – that raise rates for consumers,” Youngkin said.

A report released earlier this year by Youngkin’s office said compliance costs associated with RGGI would add $2.39 a month to a typical residential home’s bill.

Carper said that in response to Youngkin’s regulatory efforts to exit RGGI, Dominion removed the compliance fee from its electric bills earlier this summer to offset higher fuel rates. He said they expect the withdrawal to be successful, even though critics say Youngkin is overstepping his authority by acting without the approval of the General Assembly.

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