SCC: Dominion Energy Virginia customers in line to receive rate relief

The State Corporation Commission has approved Dominion Energy Virginia’s request to securitize approximately $1.3 billion of unrecovered fuel costs.

The unrecovered fuel costs accrued from higher-than-expected fuel and purchased power costs between July 1, 2020, and June 30, 2023.

The proposal is expected to allow customers to pay off these unrecovered costs over approximately 7.25 years rather than over as little as 19 months.

Dominion estimated that, as approved, customers would pay approximately $3.10 per month over 7.25 years rather than up to $14.72 per month under the traditional methodology. Final terms will not be known until the bonds are marketed and priced and are subject to change.

The request was approved under a new statutory financing vehicle created by the 2023 General Assembly.

The new statute allows Dominion, with approval, to use a special-purpose entity to issue securitized bonds to finance certain unrecovered fuel costs.

The proceeds from the bond issuance will be used to satisfy the unrecovered balance. The bondholders are paid through customer charges on the electric bill over the term of the securitization period.

The Commission required that the bond issuance, once final terms are known, must provide both customer bill reductions and a net present value to customers compared to other recovery options.

The Commission previously permitted Dominion to suspend collection of the unrecovered fuel costs on an interim basis beginning July 1, 2023, subject to the consideration of the securitization request.

Customer charges for securitization are expected to begin in Spring 2024.