Virginia Electric & Power Co. has solved the problems of its nuclear power plants, has switched most of its oil-burning plants to coal and will produce 80 percent of its electricity with coal and nuclear energy this year, Chairman T. Justin Moore Jr. told shareholders today.
At the utility's most upbeat annual meeting in years, Moore vowed that Vepco this year will conquer the difficulties that have produced high rates for its customers and low profits for its stockholders over the past several years.
"We have clearly put much of these problems behind us," said Moore, predicting that improvements in the company's operations will lead to an increase in the dividend paid shareholders later this year.
Moore disclosed that Vepco now envisions annual increases in the dividend, probably starting this fall, without predicting how much Vepco might raise its common stock dividend, currently $1.40 a share.
But Vepco's customers will have to pay higher electric bills because the company is seeking a package of rate raises that will wipe out cuts in electric bills made in the past year because of the shift to coal and nuclear power.
Summing up a series of rate increases that will hit all classes of Vepco customers, Moore said the company wants a 13 percent rise in the base rate in Virginia that will cost the customers in the state $189.6 million a year if granted.
Last year the average Virginia customer's bill went down about 7 percent because of Vepco's increased use of coal and nuclear power. If Vepco gets the rates it wants, that savings will vanish and bills will leap another 6.2 percent on top of it.
Vepco also has applied for a $16.6 million increase in North Carolina, a $16.5 million increase in rates charged municipalities and electric co-ops and a $41.2 million increase in its wholesale rates.
President William Berry said the increase sought in Virginia electric bills is needed in part to cover the cost of not building another nuclear power plant at Vepco's North Anna power station. The planned nuclear plant was scrapped because Vepco no longer expects to need it.
Vepco also asked the Virginia State Corporation Commission to raise the profit the company is allowed to earn on its investment in facilities. Vepco wants to jump the rate of return, or profit margin, from 13 1/2 percent to 16 1/2 percent.
Dissident shareholders, who have become predictable participants in recent Vepco stockholder meetings, criticized the company's continued dependence on coal asnd nuclear power and said Vepco instead should be investing in energy conservation and renewable resources. John Clewett, spokesman for a group of company critics, said it costs Vepco 6 1/2 cents per kilowatt hour to build new power plants but that it would cost only 1.8 cents to conserve a kilowatt hour of energy.