RICHMOND, VA (WWBT/AP) - State regulators say customers of Virginia's largest electric monopoly paid more than $300 million in excessive rates last year.
A new report by the State Corporation Commission said Dominion Energy's base rates produced a nearly 14 percent return on equity, a measurement of profitability, in 2017. The commission has ruled recently that a fair rate should be around 9 percent or 10 percent.
"We've talked to our customers and [they] have resoundingly told us they're very interested in adding more renewables like solar and wind power into the mix," Dominion Energy spokesman Rayhan Daudani said. "They want to shrink their carbon footprints as much as they can."
Legally, power companies like Dominion can hold on to the surplus and reinvest it in other energy options for its customers, instead of just giving the money back to its customers. That law went into effect July 1.
But hearing about the $300 million has caught some customers off guard.
"It's a little surprising considering I was unaware of it," Brittany Snedden said. "As a mom and business owner, I have two accounts with Dominion and it's kind of scary since it's getting more expensive instead of less."
Daudani said in the past the company has refunded some customers, but in the end, rates were increased to pay for alternative energy projects.
With the General Assembly's passage of the Grid Transformation & Security Act of 2018 (GTSA), the law enables utilities to reinvest any available revenue beyond their approved profit margin set by the State Corporation Commission, into other energy offerings.
"We really feel like through this investment we have the opportunity to keep their rates low and stable, while also providing them better service and cleaner energy," Daudani said.
Therefore, you more than likely won't be getting any refunds this time.
Instead, that money will go towards other projects, including solar power and modernizing the power grid.
"I feel like it is probably going to be good in the long run, but maybe letting those who support it donate money or give money to project, instead of just taking it from people," Snedden said.
"We expect to launch many of these projects next year," Daudani said. "Our grid transformation project is a 10-year plan, but they'll start to see the improvement on an incremental basis next year."
The $450 million grid transformation investment will allow customers to have more control of their power usage and their energy bill as the new Smart Meters are installed.
"It will be funded through existing base rates at no increase to customers," a news release states.
Earlier this month Dominion announced an investment in an off-shore wind pilot program off the coast of Virginia Beach.
"The two 6MW wind turbines will provide a new source of renewable energy for our customers and will provide valuable data to assess a full build-out of the project, which would generate 2,000MW of energy at full capacity," a news release said.
The pilot project is expected to cost approximately $300 million and would be funded through existing base rates enabled by GTSA. Part of the 2017 $300 million surplus would also fund the project.
"I feel like it's already expensive enough, especially for the smaller person and small business," Snedden said.
"We do have some changes going on here and there," Daudani said. "Sept. 1 the rates are actually going down slightly. If you look at the way our rates have been they've actually gone down if you go back all the way to February of 2015."
Appalachian Power, the state's second largest utility, produced excess revenues of more than $26 million in 2017.