A federal regulatory judge yesterday called for a full public investigation of the management of the Virginia Electric & Power Co., citing "disturbing evidence that something is terribly wrong."

Judge Isaac D. Benkin of the Federal Energy Regulatory Commission recommended that the commission reject a $28.8 million annual rate increase for Vepco's wholesale electric service in Virginia and North Carolina, which took effect September 1978. It was not clear how much Vepco would have to refund if the commission adopts Benkin's ruling.

Benkin also held that the multi-million-dollar costs of disposing of waste nuclear fuel from Vepco's reactors should be paid by Vepco's customers, but ruled out an increase in rates on this issue until Vepco can document estimated costs of waste disposal.

Benkin noted that Vepco and other utilities have listed spent nuclear fuel as assets, expecting to sell them eventually for processing into reusable fuel for nuclear breeder reactors.

With the Carter administration's decision to block construction of breeder reactors for security reasons, there is little likelihood that the spent fuel can be reprocessed in the near future, Benkin said.

As long as this federal policy remains unchanged, "the spent nuclear fuel in the hands of electric utilities constitutes a massive white elephant rather than a valuable asset," Benkin said.

Vepco estimated the eventual costs of nuclear fuel disposal at $41.5 million and asked FERC to include this is in rate base, on which customer charges are calculated.Benkin said no, ruling that Vepco's estimates were too speculative.

Benkin's ruling, which must be approved by FERC commissioners, opens new ground in the debate over nuclear waste disposal.

It takes the first step toward requiring utility customers to bear the potentially vast costs of fuel disposal, and thus, if these charges are imposed, public pressure could grow for a change in the government's opposition to breeder reactors.

Benkin's recommendation for an investigation of Vepco's management follows a decision in March by FERC to begin an eight-month private inquiry on the same subject.

But while FERC did not elaborate on its reasons for beginning an inquiry, Benkin's 126-page opinion dwells extensively on complaints with Vepco's operations.

The most serious charges, in Benkin's view, come from the North Carolina Utility Commission, which is leading an effort by the state government and business groups there to force Vepco to sell its North Carolina operations.

Vepco's wholesale prices in North Carolina are 40 to 50 percent higher than those charged by Carolina Power & Light and Duke Power Co., two utiliities based in the state.

NCUC concluded, after an investigation, that Vepco's costs were due to poor management and high costs of fuel used to generate electricity, complaining that several major Vepco power plants were being fueled with high-cost foreign crude oil instead of being converted to burn cheaper coal.

Benkin said that in his view, Vepco has "no real interest in taking the steps necessary to reduce its astronomical fuel costs, because those costs are automatically and rapidly passed along" to consumers.

Recovering the costs of converting a power plant from oil to coal takes much longer and cannot be done directly on customers' monthly utility bills.

Benkin also said he was impressed by evidence that Vepco's efficiency "has deteriorated." The availability of its larger, lower-cost coal and nuclear units has declined, leading to increased use of smaller, higher-cost oil-fired generating units.

Vepco, in the past, has blamed its difficulties with its nuclear power units of a variety of unexpected events, and says it leads other utilities in converting power plants to coal. Its efforts to move faster with coal conversion have been frustrated by the 1977 coal strike and changing federal air quality requirements, it said.

Vepco spokesmen declined to comment on Benkin's ruling because company officials haven't completed reading the document.

When FERC announced its private investigation in March, William W. Berry, Vepco's executive vice president, said, "We know that an impartial investigation will conclude as others have in the past that this is a well-managed, efficient company."

But the company got little support from Benkin, who said the company's financial state is "precarious."