Virginia Electric and Power Co., which only 12 days ago received a $64 million rate rise from the State Corporation Commission, asked today for yet another increase that would add 5 percent -- or $3.33 -- to a typical homeowner's monthly electric bill.
The Richmond-based utility's new, $77.1 million request, when added to previous increases in rates and fuel costs granted by state regulators over the past 12 months would mean average residential customers would pay about 47 percent more for electricity this April than they paid on April 1, 1979.
"We're a little astounded by their audacity in coming in for yet another increase," said Jerri Brown, president of the Virginia Consumers Congress, who blamed financial mismanagement for the company's repeated rate increase requests. Vepco is currently under investigation by the Federal Energy Regulatory Commission on similar complaints from some of its North Carolina customers.
Homeowners using 1,000 kilowatt hours of electricity per month -- average for most of Vepco's 1.1 million Virginia customers -- would pay $66.60 this April under the new request, as compared with $63.27 at present. One year ago, they paid $45.21, according to company figures.
Under the new $66.60 rate, Vepco's Northern Virginia customers would pay the highest electric rates in the Washington area. District of Columbia homeowners pay an average of $37.30 for 1,000 kilowatt hours, while Montgomery County residents pay $52.63 and Prince George's $51.27, according to statistics from Potomac Electric Power Co.
Vepco spokesman Dennis W. Hedgepeth said the comparison was misleading because the company's rates last year at this time were artificially low. He noted that the SCC was then still considering a major rate increase that it finally granted on April 10 and that took effect in May.
The company blamed about $54 million of its latest request on increased business expenses such as taxes, insurance, depreciation and interest rates, all of which have been aggravated by the past year's double-digit inflation rate. But it said nearly $23 million was due to the cost of purchasing power from other electric utilities during federally required shutdowns and delays at Vepco's four troubled nuclear generating units.
Vepco's two nuclear reactors at Surry, Va., about 130 miles southeast of Washington, have been shut down since February of last year for inspection and repair of possible earthquake hazards and replacement of their costly and elaborate steam generator systems. Vepco said it hopes to bring Surry 1 back on line in April and Surry 2 in June.
The North Anna 1 nuclear unit, 80 miles southwest of Washington, which has shut down twice since last September because of mechanical failures and human error, is now operating. But North Anna 2, originally due to open last summer, has been in mothballs awaiting approval of the Nuclear Regulatory Commission. The agency suspended most new reactor licenses pending final decisions on its analysis of last year's accident at Three Mile Island near Harrisburg, Pa.
Vepco has estimated it pays about $14 million each month in extra fuel and interests costs while North Anna 2 remains idle. Executive vice president William W. Berry, in testimony filed today with the SCC, cited "the regulatory paralysis surrounding nuclear generation" as one reason the company's costs had risen.
Consumer critics blame Vepco for relying too heavily on an energy source whose future was always uncertain. They said today that the company's stockholders, not its customers, should make up at least the $23 million for outside electricity purchases.
"We warned them as far back as 1975 about putting all of their eggs in the nuclear basket," said Brown of the Consumer Congress. He said a recent comparison of electricity prices in 40 cities done by the group found Vepco charged the second highest rates in the United States. Consolidated Edison in New York charged the highest, according to the survey, which compared the cost of purchasing 500 kilowatt hours per month.
"The way things are going, we'll be quickly approaching Con Ed for the dubious distinction of having the most expensive electricity in the country," Brown said.
On March 19 the SCC approved a two-step, $64.1 million increase. The first part, $18.1 million, goes into effect today and will add about 79 cents a month to the average homeowner's bill. The remaining $46 million will take effect when North Anna 2 begins operation.
Company officials insist that a simultaneous reduction in fuel prices, caused by the fact that nuclear fuel is considerably cheaper than coal or oil-generated power, will more than wipe out the impact of the increase.
SCC regulations authorize the company to earn a 13.5 percent return on common equity. Vepco's Berry said today that even with the March 19 increase, the company would earn only 10.75 percent and needed the full $77.1 million request to reach the authorized rate of return.