(Source: Richmond Times - Dispatch)Dominion Virginia Power customers would get back more than $400 million from the company under an agreement the state's largest utility has reached with the state attorney general's office and a group of large ratepayers. If approved by the State Corporation Commission, the proposed settlement of several pending Dominion Virginia Power rate cases would save a typical residential customer - using 1,000 kilowatt-hours of electricity a month - about $80 next year, the company said.

By agreeing to maintain Dominion Virginia Power's base-rate structure at pre-Sept. 1 levels, the tentative settlement would spare the utility the risk of having its rates cut, while customers would receive refunds and credits on their monthly bills in 2010.

The monthly bill for a typical residential customer would be $103.83, including the cost of pro- posed energy-conservation programs, if approved by the SCC.

That would be a 4.5 percent reduction compared with a bill of $108.73 a month for the same customer in March, the company said. That's when Dominion Virginia Power proposed a base-rate increase and other rate adjustments.

"In these difficult economic times," Attorney General Bill Mims said, "we believe that the interests of Virginia's consumers are best served by the return of their hard-earned dollars, and avoidance of rate-adjustment increases now."

Thomas F. Farrell II, chairman, president and chief executive officer of Richmond-based Dominion Resources Inc., the utility's parent company, said the proposed settlement "keeps base rates stable while recognizing the need to invest in Virginia's energy infrastructure to meet the needs of our customers."

The attorney general's office and the group of ratepayers also asked the SCC to speed up acting on Dominion Virginia Power's base- rate case so customers could receive the savings as soon as possible.

Dominion Virginia Power, which has about 2.3 million customers in the state, had been asking the SCC for a $250 million rate increase, the first in its base rates in 17 years.

Under the agreement, Dominion Virginia Power's base rates would not change from those that existed before it filed for an increase in March. The interim base-rate increase that took effect Sept. 1 would be returned to customers. And the company's base return on equity would be set at 11.9 percent.

Besides the attorney general's office, Wal-Mart, Kroger, Chaparral (Virginia) Inc., MeadWestvaco Corp., International Paper Co., and the Apartment & Office Building Association of Metropolitan Washington signed on to the agreement.

The proposed settlement still could encounter opposition, and the Virginia Committee for Fair Utility Rates, another group of industrial customers, did not join in the agreement.

The $80 annual savings for the typical residential customer includes a one-time credit of about $24 and monthly bill adjustments totaling $56 through December 2010, Dominion Virginia Power said. Individual customers' savings would depend on their actual electricity consumption.

Experts for the attorney general's office told the SCC on Monday that Dominion Virginia Power's rates should be reduced by $238 million or customers should receive a refund of $153 million.

State law limits the commission to ordering either a rate reduction, or a refund of a portion of last year's earnings above its authorized rate of return, but not both.

Yesterday, Dominion Resources affirmed its 2009 operating earnings guidance of $3.20 to $3.30 per share and its 2010 operating earnings outlook of $3.20 to $3.40 per share.

"We will be in a better position to provide details for 2010 after we receive a final order in the Virginia base-rate case proceeding," Farrell said in a statement.

Contact Peter Bacque at (804) 649-6813 or pbacque@timesdispatch.com.

MEMO: BREAKING NEWS 11/5/09 9:06 PM TimesDispatch.com

Originally published by BACQUE; Times-Dispatch Staff Writer.

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