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Rates 101

Rates are set to recover the cost of delivering electricity to you and to support projects that will meet the ever-growing demand for more energy. Factors like rate class, energy use, fuel costs, and the season all play a role in determining the rate you pay.

Demand Has Steadily Increased

We like new products. Many of the new technologies we enjoy - and consider must-have parts of our daily lives - rely on electricity to operate. A large-screen television, for example, uses five times as much power as older models. Home electronics now account for a considerable percentage of consumer energy use, according to the Environmental Protection Agency.

Rates, Tariffs and Riders

Rate Schedules and Special Tariffs detail the rate or charge for a particular classification of service, including all special terms and conditions under which that service is furnished at the prescribed rate or charge. When you accept electric service from Dominion Energy Virginia, you agree to certain requirements specified in the application for electric service, and you're bound by the applicable rate schedule(s) and Terms and Conditions which are currently on file with the State Corporation Commission.

Riders are charges applied to certain rate schedules to recover various costs associated with Dominion Energy's electric operations and electricity production. For example, Fuel Charge Rider A applies to a number of filed rate schedules as well as applicable energy charges specified in any special rates, contracts or incentives approved by the SCC, and it increases the price of electricity by a specified amount per kilowatt-hour (in this example, a few cents).

Adding Up The Costs

To calculate how much to charge you, we examine how much energy you use during a billing period based on readings from your electric meter (in kWh). Next, we calculate the total using your applicable rate schedule, special tariffs and/or riders, plus surcharges and taxes.

What's In Your Bill

When you look at a typical resident electric bill from Dominion Energy Virginia, you will see a detailed summary of everything that is included in the total. (View a sample bill.) For example, you'll see a charge for the "Distribution Service," which covers the use of local wires, transformers, substations and other equipment used to deliver electricity to your home or business.

You'll also see "Electricity Supply Service" charges for the generation and transmission of electricity, including fuel.

This is divided into three sections:

Generation - Charges for the production of electricity from Dominion Energy's power plants;
Transmission - Charges for moving electricity from Dominion Energy’s power plants to substations; and
Fuel - Charges associated with the cost for fuel used to produce electricity, including transportation.

There also is a Sale and Use Surcharge, State/Local Consumption Tax, and a Utility Tax in your total charges.

Setting Rates

It costs money for Dominion Energy to produce electricity and deliver it to your home or business, and rates are set to help us cover those costs. As things change, like energy demand, fuel costs, etc., rates have to be adjusted. We have generation and transmission line projects designed to keep the power coming and going, projects to expand the use of renewable resources, and unique programs that help customers save money.

Rate Review Process:

Determine what we need to remain financially healthy and cover the costs of doing business
Determine the right rates for each class of customer, based on their average use of electricity and other electric system demands they create
Factor in project to maintain reliability and meet future demands (such as generation and electric transmission projects)
Factor in the economy and changes in the electric industry, plus the needs of customers and communities
SCC Approval

Approvals

Dominion Energy can't raise rates whenever we want because we're a regulated utility. That means we are required to follow a specific public process when we request to change rates in any way. We must prove that the rate change is justified before it can be approved by the Virginia State Corporation Commission. Not one cent can be added to a customer's rate without the SCC's approval. When we file a request to adjust rates, our information is carefully reviewed and public testimonies are taken. The SCC then sets rates it feels will best serve the public interest while enabling Dominion Energy to run a healthy business and earn a fair return for shareholders. (Learn more about the SCC's process below.)

Role of the SCC

Electric rates in Virginia are determined in rate cases conducted by the State Corporation Commission (SCC). These rate cases are governed by applicable laws, primarily statutes enacted by the General Assembly of Virginia. Occasionally federal laws enacted by the U.S. Congress or regulations issued by federal administrative agencies such as the Federal Energy Regulatory Commission (FERC) apply to a Virginia rate case. The applicable portions of Virginia law that govern rate cases are generally found in Va. Code § 56-585.1 and Chapter 10 of Title 56 of the Code of Virginia (Va. Code § 56-532 et seq.), although other code sections may sometimes apply.

Value for Your Energy Dollars

Rates are set to help us cover the costs of producing electricity and delivering it to your home or business. However, your dollars also play a crucial role in helping us meet our commitments:

Provide reliable energy
Reduce Virginia's dependence on imported power
Plan for the future
Create cleaner air and water
Promote renewable and other power sources

Examples of generation projects:

Virginia City Hybrid Energy Center
Bear Garden Power Station
Warren County Power Station
Solar Projects
Wind Projects

Examples of customer programs:

Examples of transmission and distribution enhancements:

Transmission Line Projects
EDGE Energy Efficiency Program

The Bottom Line

We plan to meet the increased demand in Virginia and North Carolina through a balanced program that includes construction of new generating facilities, including those using renewable energy sources, and upgrades of existing generating units.
We're developing programs to help customers use energy more efficiently and reduce their demand for electricity at peak times, including very hot or cold days.
In addition, we are also making significant improvements and expansions to our electric transmission and distribution system to improve service reliability and meet future demand.