Virginia Electric & Power Co., reporting increased earnings, yesterday raised its quarterly dividend by 2 1/2 cents to 40 cents a share, or $1.60 on an annual basis.

The Richmond-based utility reported that earnings for the first nine months of the year increased 20.6 percent to $205.8 million ($1.47 a share), from $170.6 million ($1.27) during the similar period of 1981.

For the 12 months ended Sept. 30, Vepco said net income totaled almost $273 million ($1.98), up 12.1 percent from $243.4 million ($1.85) in the preceding 12 months.

Vepco Chairman T. Justin Moore Jr. said Vepco's announcement of the dividend increase is in line with company policy to consider changes late in the year after the effects of summer weather and the results of rate cases are known.

The Ryland Group, a home-building company based in Columbia, Md., reported third-quarter earnings were up 17 percent to $1.1 million (40 cents), compared with $1 million (33 cents) in the 1981 period.

Chairman Charles E. Peck said Ryland's mortgage company and homes division were responsible for the increase in profitability even though settlements were down from 1981.

Earnings were down 25 percent for the first nine months of the year, however. Earnings in the January- September period totaled $1.8 million (60 cents), down from $2.5 million (80 cents) in the 1981 period.