The Virginia State Corporation Commission yesterday ordered Virginia Power to refund about $41 million, ruling that the temporary rate increase the firm received last year was too high.
The order means residential customers using an average 1,000 kilowatt hours of electricity a month will get a one-time credit of $23 on their bills. The credit will be reflected on bills mailed on or after Aug. 5, the company said.
"We are pleased to have a final decision by the commission in this complex case, which was originally filed in November 1984," said James E. McDonald Jr., a spokesman for Virginia Power, previously called Virginia Electric Power Co., or Vepco.
The decision represents the last in a series of rate changes that will leave the company's rates 1 percent lower than they were a year ago.
Virginia Power originally had asked to increase rates by $149.7 million in November 1984 to cover general operating expenses and costs associated with the Bath County pumped-storage plant -- a giant $1.7 billion project that generates electricity utilizing the movement of water.
Construction on the plant, the largest of its kind, began in 1977, but ran into problems in March 1985. The plant utilizes two reservoirs, one situated high above the other, to generate electricity. At times of heaviest electricity demand, water falls through tunnels from the higher storage reservoir and spins powerful turbine generators as it flows into the lower reservoir. At night, the turbines pump the water back up the mountain to its upper reservoir.
When plant operators began testing the plant in the spring of 1985 by pumping water up one tunnel, leaks caused water to seep onto the mountainside.
In May 1985, the company asked the SCC to delay the rate case until it could finish the repair program, and split the case into two parts. Virginia Power asked for $47.7 million in general operating expenses and for $102 million to pay for the Bath County power plant.
The company was allowed to put the total rate request into effect, subject to ultimate SCC approval and a possible refund.
Average rates, including adjustments for the lower cost of fuel for the company to generate electricity, rose from $68.23 to $70.46.
The company experienced high water pressure at the plant again in January, and expanded its program to include water-pressure relief wells in the mountainside. The total repair program has cost the company $64 million.
Yesterday, the commission determined that the company should receive only slightly more than $5 million for its operating expenses because of falling interest rates, lower fuel costs and an improved economic outlook.