Dominion Virginia Power seeks First Fuel Rate Increase In Two Years

- Company cites expected higher fuel costs, increasing electricity demand

- Monthly residential bill would remain below national, regional levels

- Company's base electric rates, profit level to remain unchanged

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May 03, 2013, 01:05 ET

RICHMOND, Va., May 3, 2013 /PRNewswire/ -- Dominion Virginia Power asked state regulators today to approve the first fuel rate increase in two years as fuel prices and customer demand for electricity are projected to increase by July 2014.

If approved by the Virginia State Corporation Commission (SCC), the monthly 1,000 kilowatt-hour bill for the typical Dominion residential customer would increase by $2.36, from $108.39 to $110.75, which would still be below national and regional averages. The increase would occur July 1, pending the annual review and decision by the commission.

The fuel rate, which comprises about 25 percent of a typical residential bill, pays for the natural gas, coal, uranium and biomass the company purchases to generate electricity for its 2.3 million Virginia customers. Base rates and special charges for approved new power projects, energy efficiency measures and transmission make up the remainder of the bill.

The company earns no profit on what it collects for fuel and passes any cost savings or increases directly to customers. Dominion maintains a balanced fuel mix, which reduces price volatility when one fuel source is relied on too heavily.

The primary drivers for the requested adjustment are higher fuel prices, a return to normal demand for electricity from customers and one additional nuclear refueling outage in the next year compared to the previous year. Dominion's nuclear power stations produce the least expensive electricity among its fuel sources; therefore, replacement electricity needed during the refueling outages that occur every 18 months is usually more expensive.

Other annual rate adjustments either are occurring or are proposed to occur between today and Sept. 1. The SCC recently approved a 19-cent increase in the typical monthly residential bill, effective tomorrow, for the company's energy efficiency programs. On Sept. 1, a $1.32 monthly increase is proposed pending SCC approval of the Brunswick County Power Station (83 cents) and transmission-related costs (49 cents).

Dominion Virginia Power is a subsidiary of Dominion (NYSE: D), one of the nation's largest producers and transporters of energy, with a portfolio of approximately 27,500 megawatts of generation, 11,000 miles of natural gas transmission, gathering and storage pipeline and 6,300 miles of electric transmission lines. Dominion operates one of the nation's largest natural gas storage systems with 947 billion cubic feet of storage capacity and serves retail energy customers in 15 states. For more information about Dominion, visit the company's website at www.dom.com.

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SOURCE Dominion Virginia Power