Dominion Energy proposes hefty rate hikes

Fortune 500 utility Dominion Energy is proposing a fuel rate increase and additional base rate increases which, if approved, could raise monthly power bills for average residential customers by as much as $21.43 by 2027.

The Richmond-based utility proposed new base and fuel rates in separate filings with the Virginia State Corporation Commission on Monday. If approved, the proposed $10.92 monthly fuel rate increase for a typical residential customer would take effect on July 1. Meanwhile, the company is proposing a base rate increase of $8.51 per month starting Jan. 1, 2026, and an additional $2.00 per month starting Jan. 1, 2027, for a typical residential customer.

The current monthly bill for a typical residential customer is $140. In 2027, if the new rates are approved, the typical monthly bill would rise to $161.43 — a 15.3% increase from the current bill.

The rate hikes would mark the company’s first increase in base rates since 1992.

Dominion says that the proposed rates reflect the increased cost of labor, materials and equipment, power capacity and fuel, as well as grid upgrades to reliably serve customer growth.

“We’re focused on providing exceptional value for our customers every single day,” said Ed Baine, president of utility operations and Dominion Energy Virginia, in a statement. “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.”

According to Dominion, the request reflects “significant inflationary pressures since 2023.” In the past decade, the electric utility’s residential rates have increased at a rate approximately 40% lower than the rate of inflation.

“We know our customers are feeling the impact of inflation in other areas of their lives, and some of our customers may need assistance with their power bills,” Baine said in a statement, citing Dominion’s EnergyShare bill assistance program, which includes free home energy efficiency upgrades for eligible participants.

Part of the fuel cost increase Dominion cited is due to a scheduled expiration of a $3.99 fuel credit. Other factors include extended cold weather in January and higher forecasted fuel commodity prices.

The company is proposing to move power capacity costs from the base rate to the annual fuel rate to promote rate stability. These power capacity costs are set by regional electric grid operator PJM and assigned to Dominion.

Dominion is also proposing a new rate class for high energy users, including data centers, which are projected to quadruple their energy demand in Virginia by 2040. The company also proposes new consumer protections to ensure these customers continue to pay the full cost of their service and other customers are protected from stranded costs.

Under the proposal, Dominion says high energy users would be required to make a 14-year commitment to pay for their requested power – even if they end up using less.

Dominion provides regulated electricity service to 3.6 million homes and businesses in Virginia, North Carolina and South Carolina, and regulated natural gas service to 500,000 customers in South Carolina.