The Virginia Electric & Power Co. asked the Virginia State Corporation Commission yesterday to approve a $90 million rate increase that would raise the average residential electric bill 6.2 percent in 1985.
The rate request would boost rates overall by an average of 5.2 percent, said Bill Hall, a spokesman for Vepco. But the increase would not be distributed evenly among all classes of customers. The average residential bill will rise $4.24, from $68.16 to $72.40 per month, for a 6.2 percent increase, said Hall. Commercial and industrial customers would experience smaller increases -- 1.7 percent and 3.5 percent, respectively, he said.
Vepco president William W. Berry said the increase, which would boost the company's overall revenues by 4.7 percent, is necessary to cover the costs of beginning operations at a new $968-million hydroelectric power generating station in Bath County and to provide for other costs not covered by current revenues.
"We are very fortunate that we can bring into service the massive Bath County project and cover other new costs with such a small increase," Berry said. "We are able to keep our rate increase this low because the Bath County project will add considerably to the massive fuel cost reductions achieved by excellent nuclear and coal unit performance."
Vepco is asking that the rate increase take effect May 1, the same day the large hydroelectric plant begins operating. Vepco owns 60 percent of the plant; Allegheny Power System owns the remainder.
The major portion of the requested $90 million increase -- $63 million -- is for the Bath County Power Station. An additional $31 million is necessary to make up the shortfall between the utility's authorized rate of return of 15 percent and its actual return on equity of 12.6 percent for the 12 months that ended June 1984, Berry said.
Vepco also needs $13 million for a payment to the Department of Energy for the permanent disposal of nuclear fuel and $3 million to make some equipment depreciation adjustments, he said.
David Hathcock, a spokesman for the Richmond Attorney General's Office, said he had not seen the filing as of late yesterday afternoon and could not make a comment on the rate request. The Attorney General's consumer counsel will represent the public in the case.
In addition to yesterday's request for an increase, Vepco is waiting for the Virginia State Corporation Commission to decide whether a $23.8 million inflation adjustment charge that began last April should be refunded to customers. The charge was to prevent Vepco from losing income because of inflation. A hearing examiner's report, issued in October, suggested the amount be decreased to $21.3 million but did not recommend a refund, Hall said.
The SCC is expected to issue an order early next week on the refund. Should the SCC rule that $2.5 million be refunded, the adjustment would be made in the upcoming rate request.
Hall said even though the company had been charging customers for the inflation adjustment, Vepco's rates actually declined by about 1.5 percent in 1984 because of fuel adjustments that are automatically passed on to consumers. Fuel adjustments reflect increases or decreases in the prices paid by utilities for fuel.
The company, he said, is committed to keeping the rate of increase in utility costs at or below the rate of increase in the Consumer Price Index. "By next May the projected Consumer Price Index will have increased about 38 percent since January, 1980, compared to a 16 percent increase in Vepco's residential bill," he said. "The increase we are requesting is just one half a percentage point above the rate of inflation," he said.
Vepco serves about 1.4 million customers in Virginia as well as portions of West Virginia, and Northeastern North Carolina.