The Virginia Electric and Power Co. plans to seek a temporary increase in electric rates that, if granted in full, could raise customers' bills between 30 and 40 percent for the rest of the year.
Vepco President Stanley Ragone said in a telephone interview that the temporary increase is necessary because of the shutdown of two of the company's nuclear reactors. This forces reliance on more costly oil-fired generating plants and power bought from other utilities at rates about twice as high as electricity generated by nuclear power.
The company will ask the Virginia State Corporation Commission (SCC) for a total increase "in the neighborhood" of $130 million to pay for these added fuel costs, according to another company official. He said the rate increase figure will not be finally agreed on until this morning but will be "somewhere between 30 and 40 percent."
If approved in full, the increase could mean that customers would pay between $17 and $23 more a month for 1,000 kilowatt hours, which the company says is a typical monthly average. Customers now pay $56.75 for that amount of electricity. Rates would return to their current levels next January.
Vepco officials have estimated the shutdown of the nuclear reactors has cost the company between $200,000 and $300,000 a day in added fuel costs.
Ragone also blamed the SCC, saying the commission could have lessened the size of the new request had it granted a Vepco request earlier this year for a $54 million increase. The commission allowed the company only $10 million of that request, citing uncertainty over how long the two reactors would be out of operation.
Vepco closed its Surry Two nuclear reactor in February for replacement of damaged steam generators. The Nuclear Regulatory Commission (NRC) ordered the Surry One reactor shutdown in March because of uncertainty over whether the reactor could withstand a severe earthquake.
The company announced yesterday that the NRC has authorized the reopening of Surry One. Company vice president said he expects the reactor to be returned to service sometime next month.
Ragone said he was uncertain whether the SCC would allow Vepco to collect the entire requested increase by the end of the year, as the company will ask, or would reduce the impact by spreading an increase over a longer time period.
"I can't speak for what they [the SCC] are going to do . . . But I have a hard time believing that big a jump will be possible," said Ragone.
The commission will make its decision on the increase after hearing testimony on fuel costs Sept. 7. The hearings are part of the Commission's new fuel factor system, under which utilities are asked to project fuel costs for the coming year and may also win adjustments through quarterly reappraisals such as the one Vepco is now requesting.
The state legislature approved the fuel factor system, which took effect last January, in place of the old fuel adjustment clause, under which Vepco and other utilities could automatically pass added fuel costs on to customers' bills, subject to later SCC review.
William Stephens, staff engineer for the SCC's division of energy regulation, said he was not surprised at the size of Vepco's new request.
"We knew it was coming because the commission had disallowed the company's earlier fuel cost projections," said Stephens, who would not predict how much of the increase the commission would allow.
In another matter, Vepco said yesterday it had discovered a problem with the emergency power cables at its North Anna nuclear plant.