Virginia Electric and Power Co. provided a sober assessment of future electricity prices yesterday.
Customers of Vepco throughout most of Northern Virginia and in the most populous sections of the state can expect electric rates to more than double over the next decade with annual increments exceeding the national inflation rate, the Richmond-based utility told the State Corporation Commission.
Vepco's forecast differs sharply from that of Potomac Electric Power Co., which serves the District and its populous Maryland suburbs. Pepco Chairman W. Reid Thompson has predicted that Pepco charges will trail the national consumer price inflation generally - basically because the Washington firm has less need to expand generating capacity in the near future.
Moreover, Vepco asked the state regulatory agency in Richmond yesterday for immediate reconsideration of a recent fuel cost decision. Stating that Vepco now is paying more than $20 million a month more for fuel each month than it is recovering through automatic fuel increases in monthly bills to customers, President Stanley Ragone said the utility is facing a growing cash crisis.
Without quick action, he warned, Vepco may be forced to delay construction of a generating plant - a delay which could cost $125 million in additional funds.
Vepco wants the SCC to put into effect immediately a rate increases of $18 million a year requested in May, subject to refund if found to be exhorbitant.
In a letter accompanying Vepco's forecast for the 1980s, Ragone estimated that general inflation over the decade would average 6.4 percent a year - far less than the current annual rate of 13 pecent. Vepco's rate increases, counting projected fuel cost boosts, are expected to rise 7.5 percent a year over the decade, or about one percent more than the general rate of inflation.
The average monthly bill for a Vepco residential customer is now $56.75 a month, or $681 a year. Assuming Ragone's forecast is correct and residential rates over the next decade are the same proportion of overall revenues as in 1979, an average annual residential but would more than double by 1989 to $1,400.The current and future rates for all-electric homes wou ld be much higher.
Ragone predicted that annual fuel costs per kilowatt-hour would be 11.1 percent for oil, 7.6 percent for coal and 8.3 percent for nuclear generation - all of them topping the general inflation rate.
To reduce oil use, in accordance with President Carter's ambitious energy-independence program, Vepco will have to spend "enormous" amounts of money each year, Ragone said. By 1988, the annual outlays projected will increase to $2 billion for Vepco alone, he added.
"Alternate forecasts, assuming continuation of delays such as we have been experiencing in placing required rate relief (increases) into effect, clearly indicate it would be impossible for us to build the required facilities to meet projected future loads and at the same time convert additional units to coal..." he added.
Overall, Vepco is predicting a increase of 4.5 percent a year in winter peak demand for electricity. The company now can produce 9.5 million kilowatts at peak periods and, by 1988, Vepco is prediciting a peak demand of 14.7 million kilowatts.
Construction of new facilities to meet this growing demand for power, and to provide transmission facilities or plant conversions, is estimated to cost $10.4 billion from 1979 through 1988, he added.
On the subject of immediate rate needs, Ragone said a current deficiency of $20 million a month reflects soaring oil costs and government-man-dated delays in use of nuclear power plants. "The reasons are beyond the control of either Vepco or the Virginia Commission," he asserted.
He threatened to suspend construction of a pumped storage generating plant in Bath County - providing an immediate savings of $6million or more in 1979 but boosting the project's total cost by "at least" $25 million and delaying the plant for at least a year.
Additional delays would simp ly add another burden for Vepco's customer - a situation that could be avoided by action now to prevent a cash flow crisis for the utility, he argued.