Virginia Electric and Power Co., citing sharp increases in business costs due to inflation, today asked the State Corporation Commission for a $189.6 million rate increase that would add 13 percent -- or between $6.06 and $8.40 per month -- to a typical customer's electric bill.
The Richmond-based utility emphasized that even if it wins the full request, the increase in customers' bills for 1980 and 1981 will average only 6.2 percent, well below the 23 percent general inflation rate reflected in the Consumer Price Index.
But the new schedule, which Vepco wants to begin charging Aug. 29, would make its rates the highest in the Washington area and would be about 47 percent higher than rates customers paid two years ago.
Vepco President William Berry said the utility's residential customers would bear the largest percentage increase -- 14 percent -- because of a proposed shift in the way the utility charges its customers.
"Commercial and industrial customers are carrying slightly more than their fair share," Berry told a news conference. "The higher increase for residential customers is an effort to match prices with costs."
Under the Vepco request, a typical Northern Virginia resident who uses 1,000 kilowatt hours of electricity per month would see his bill rise by 9.4 percent, from its present $64.32 to $70.38. Under the company's winter rates, which are in effect from October through May, the typical bill would increase 14.5 percent, from $57.96 to $66.36.
Company spokesman Paul G. Edwards said about 5 percent of the 13 gap between Bepco's expenditures and revenues that inflation caused in 1980. He said another 5 percent is needed to raise the company's rate of return on money invested by stockholders to 16.5 percent, from its present 13.5 percent.
The 13.5 percent ceiling was established by the commission in 1975, long before dramatic rises in interest rates over the last two years.
"In the climate created by today's high interest rates, Vepco cannot be expected to compete for investment dollars while being limited to a return of only 13.5 percent," Berry said today.
Vepco also is asking for $22 million -- about 1.5 percent of the request -- for expenses it has incurred in cancelling North Anna Four, a projected nuclear plant that company officials decided to scrap late last year because they said it would not be needed. The company will incur total costs of $165 million for the canceled plant over the next 10 years -- cost that Vepco expects its customers to pay.
"They can just forget about that," said Jerri Brown, spokesman for the Virginia Consumers Congress. "We'll argue, as we have in the past, that Vepco should not be allowed to charge cosumers for its mistakes. If they'd listened to our testimony [during previous commission rate hearings] in 1974, they'd never have started on that plant in the first place."
Vepco, which has been repeatedly criticized because of its frequent rate increase requests and problems with its nuclear power plants, reorganized its management and revised its operaion during the last year in an effort to increase efficiency. Company officials and some utilities analysts have said Vepco has made much progress but Brown said he and other consumers remain skeptical.
"They still haven't shown they're efficient enough to deserve this kind of rate increase," said Brown, who said his group would also oppose Vepco's request to raise its return on investment. "In a volatile market, they're giving investors a guaranteed rate of return and they're not having trouble raising money."
The company received three rate increases totaling $126 million from Virginia regulators last year. But those increases were more than offset by decreases in the company's projected fuel costs and Edwards said the typical customer's bill actually dropped 7 percent.
Fuel costs dropped because the company was able to use more domestically produced coal and nuclear power and less imported oil. In 1979, the year of the Three Mile Island accident, the company got only 17 percent of its electricity from nuclear power, while this year it expects to get 41 percent of its electricity from nuclear power, while this year it expects to get 41 percent. Two of its four nuclear power, while this year it expects to get 41 percent. Two of its four nuclear plants are presently closed for refueling and repairs, but all four are expected to be running by midsummer.