Dominion Va. Customers Are Bracing for Bigger Bills

Four large commercial customers have filed paperwork to possibly intervene in the case, including the business coalition Virginia Committee for Fair Utility Rates, the Department of the Navy and MeadWestvaco, the paper and packaging company, which is moving its headquarters to Richmond.

Shaun Pharr, senior vice president for government affairs for the fourth group, the Apartment & Office Building Association of Metropolitan Washington, said he questions the magnitude of the increase. "We will be scrutinizing it closely," he said.

The state attorney general's office, which represents consumers in rate cases, recommends that the commission approve a 17 percent increase.

If approved this month, Dominion would bill customers for projected fuel costs incurred in the next year. In July 2009, customers' rates could be adjusted if the estimates end up being incorrect.

But even if this year's proposed increase is approved, Dominion customers would still pay less, on average, than electric customers across the nation, including those in Maryland.

In Maryland, Pepco customers pay $140 and Baltimore Gas and Electric customers pay $150. In the District, Pepco customers pay $89, considerably lower because of the smaller size of the homes. The national average is almost $114.

This year, Dominion will offer more ways to ease the burden on customers. It will spend $5 million on emergency grants to help customers pay their bills and accept more people into its program that allows bills to be paid in 12 nearly equal monthly installments.

For decades, Virginia's power companies operated under State Corporation Commission regulations that controlled prices because companies held monopolies in the market for power.

But in 1999, the General Assembly voted to cap or freeze rates while phasing out some of those regulations in favor of a deregulated industry to foster competition and keep prices low. That idea was pursued across the nation.

But the competition never materialized, leading to huge rate increases in some states, including Maryland. So in 2007, Virginia legislators abandoned the shift to deregulation and again embarked on rewriting the complex laws that govern the state's power companies.

Del. Harvey B. Morgan (R-Gloucester), the most vocal opponent of the bill, said that this year's proposal might be justified by fuel costs but that he worries about the bill's long-term effects on Dominion rates.

"We gave them the moon," he said.

Del. Clarke N. Hogan (R-Charlotte), who helped write the 2007 bill, said this year's situation has nothing to do with the changes in the law and everything to do with fuel prices.

"I don't think anyone is surprised that energy costs most than it did," he said. "These fuel increases are driven by higher fuel costs that are global."

Staff writer Lisa Rein contributed to this report.