Virginia utility regulators refused yesterday to consider a $35.9 million chunk of a Virginia Electric and Power Co. request for $118 million in temporary rate increases.
The State Corporation Commission, in a 2-to-1 decision, did agree to review the rest of the proposed surcharge, which Vepco wants to cover start-up costs of its new North Anna I nuclear power plant. A hearing will be held April 3.
If granted, the North Anna surcharge would go into effect when the plant in Louisa County begins commercial operation, expected in May. At the moment, the controversial plant is waiting for issuance of its final operating license.
Vepco officials expressed disappointment at the loss for the time being of the $39.5 million, which they has said was needed to cover a shortage in earnings, and protect the untility's image on the national money markets. "The order limits our ability to finance at reasonable rates the construction of facilities required to provide our customers with an adequate supply of electricity," said Vepco president Stanely Ragone.
State Corporation Commission attorney Richard Rodgers has argued in a hearing Thursday that Vepco is expected to ask for about $80 million in a routine rate increase petition later next month. He added the $39.5 million boost should be evaluated on the same basis, in the same manner and at the same time as the larger amount.
Vepco' total request comes to $200 million. The North Anna start-up expenses could be partly offset, however, by savings on cost of nuclear fuel, cheaper than oil, which could be as much as $50 million, Vepco said.