RICHMOND, Aug. 28 -- The staff of Virginia's utility regulatory commission, citing federal tax law changes and a healthy business climate, today recommended a $129 million cut in Virginia Power's electricity rates, which would save the typical residential customer about $3.50 per month.

In a 297-page report to the three members of the State Corporation Commission, SCC energy analysts also sharply criticized several Virginia Power accounting procedures and accused the giant utility of being less than forthcoming in producing needed financial data.

While the SCC itself will have the final word on the recommended rate reduction, the massive staff report already has put the giant utility on the defensive. Indeed, some Virginia Power executives are now resigned to the prospect of being ordered by the commission to cut their base rates for the first time in several years, utility sources said.

Company spokesman William N. Curry issued a terse statement late today saying Virginia Power will formally respond to the SCC staff report within two weeks. "There may well be recommendations that we can agree to, as well as ones we cannot," Curry said.

Meanwhile, Virginia state Sen. Clive L. DuVal 2nd, a Fairfax County Democrat who faces a reelection challenge this year, today filed a notice of protest urging the SCC to consider a rate reduction of at least $100 million. DuVal's request, as well as other rate proposals from the state attorney general's office, a coalition of major industrial users and the Fairfax County government, will be considered by the SCC when it opens a week-long hearing into Virginia Power's rate structure Sept. 14.

In its report, the SCC staff proposed financing the rate cut by lowering the utility's return on equity from 14.5 percent to about 13 percent. Earlier this year, in filing a rate increase proposal that the SCC has since scrapped, Virginia Power itself proposed a voluntary cap of 13.5 percent on its equity profits.

If the SCC follows its staff recommendation, Virginia Power's revenue, which amounted to $2.3 billion in 1986, would decline by 5.7 percent, SCC spokesman Ken Schrad said today.

The SCC staff's case for a rate cut is essentially two fold: Not only will Virginia Power enjoy lower corporate tax rates under the federal Tax Reform Act of 1986, the utility also has posted impressive profits in recent years.

"For the third year in a row, a record number of customer connections was achieved {and} Virginia Power reached record peak demand twice in 1986 and continued to experience demand in 1987," the report said. "Revenues rose more than enough to offset increased expenses."

The SCC report also said that commission staff members had made "many futile attempts" to obtain key financial data from Virginia Power and that the "company was, in essence, saying that the staff should accept these numbers even though we cannot identify them."

Curry, who calculated the average savings under the proposed rate cut at $3.52 per month for residential customers, said the company "recognizes the commission staff's need for timely and accurate information.

"We will work with the staff to do what is necessary to improve our performance in that regard," Curry said in a prepared statement.