Lower Fuel Costs, Lower Corporate Taxes to Mostly Off-Set Costs of Investment in Highly Efficient New Power Stations and Improvements in Service Reliability
RICHMOND, Va. – Dominion North Carolina Power today asked the North Carolina Utilities Commission for an increase in base rates, largely to recover costs related to improvements in operations, service reliability and the addition of two increasingly clean and highly-efficient gas-fired power stations to the company’s fleet. The company expects the requested increase in base rates to be largely offset by an anticipated reduction in costs for fuel used to generate electricity and a reduction in taxes.
“Dominion North Carolina Power is committed to providing reliable, competitively priced electric service around the clock,” said Robert M. Blue, president of Dominion North Carolina Power. “Over the last four years, Dominion has made significant investments in generation, transmission, and distribution infrastructure and today we’re requesting a necessary increase to reflect the increased cost of serving customers.”
Since 2013, Dominion has invested approximately $272 million in upgrades to its North Carolina transmission and distribution systems, including work on the Battleboro to Tarboro and Elizabeth City to Winfall lines, as well as numerous distribution substations across the system. The company is continuing to make substantial investments, including an additional spend of $243 million in North Carolina transmission improvements through 2019 to protect cricital infrastructure and ensure a highly-reliable power delivery system for customers.
North Carolina customers will also benefit from two natural gas-fired generating stations. After achieving commercial operation in December 2014, Warren County Power Station created $66 million in fuel savings for customers in Virginia and North Carolina in its first full year of service. Brunswick County Power Station is planned to be in service in May. Together these highly efficient facilities are expected to save customers of the two states more than $2 billion over the long term by reducing the need for purchased power.
For residential customers, the net effect of the proposed change in base rates, when combined with a projected reduction in fuel costs and taxes, will be an approximately 6.5% increase. The company is proposing a rider credit to refund excess deferred income taxes, and will finalize its projection of the fuel charge reduction in August. In total, a typical 1,000-kilowatt-hour residential bill would increase from $105.83 to $112.68 per month. The company’s larger users, commercial and industrial customers, would likely see a decrease because of the higher percentage of fuel in their total rate.
If approved, the company’s average rates across all customer classes are projected to remain competitive in the South Atlantic region.
If approved as requested, the rate adjustment would take effect November 1, 2016, on a temporary basis subject to refund pending a final Order from the Commission. The company anticipates rates will be approved on a permanent basis on January 1, 2017.
Base rates in North Carolina have not changed since November of 2012. Fuel rates are adjusted annually.
Dominion North Carolina Power is a subsidiary of Dominion (NYSE: D), one of the nation's largest producers and transporters of energy. Dominion provides energy or products and services to more than five million customers in 14 states. It has a portfolio of approximately 24,300 megawatts of generation and 6,500 miles of electric transmission lines. Dominion also operates one of the nation's largest natural gas storage systems with 933 billion cubic feet of storage capacity. For more information about Dominion, visit the company's website at www.dom.com.