Tale of 2 Energy Companies

Va. Natural Gas cuts customers a break

While one energy company wants to jack up prices for customers, another one is cutting their customers a break.

The good guy is Virginia Natural Gas, which said it will reduce its monthly fuel charge from 91 cents per hundred cubic feet of natural gas to 74 cents, which comes out to about a $9-per-month reduction in a monthly bill. And on top of that, the price drop follows a similar one in February.

The bad guy is Dominion Virginia Power. The company asked state regulators Tuesday to approve a 6.9 percent rate increase, which would be would be phased in over 14 months and would eventually add about $7.50 to a monthly bill.

The reasons for the decreases and increases? VNG said wholesale natural gas prices have declined, while DVP said it has to increase rates in order to raise generating capacity and expand energy conservation programs.

"The bottom line here is this will allow us to keep rates lower in the future," DVP president David Heacock said.

We're all sure that will be the case, Mr. Heacock. Just look at what Dominion has done recently:

  • Passed along an 18 percent increase in fuel costs to customers last summer.
  • Now that fuel costs have decreased, the utility proposes decreasing the fuel rate by 3.3 percent. But that rollback is included in the overall 6.9 percent increase sought by Dominion.

Confused yet? Perhaps that's the way they want it. But wait, there's more.

  • The first change customers will see will be the fuel rate decrease on July 1. That will reduce the typical customer's monthly bill by about $3.64 per month.
  • The base rate increase takes effect Sept. 1, and a series of smaller increases tied to specific projects and conservation programs would be phased in through May 1, 2010.

Oh, there's even more...

  • Along with the base rate and fuel rate adjustments, Dominion is seeking separate increases for the Bear Garden Power Station in Buckingham County, $1.40 a month; transmission projects and related expenditures, $1.26 a month; the Virginia City Hybrid Energy Center in southwest Virginia. $1.78 a month; and new energy efficiency and conservation programs, 40 cents to 50 cents a month.

But the company emphasizes that its typical residential customer pays 9.3 percent less than the national average.

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According to Dominion, utility rates nationally have increased by 52 percent -- slightly more than inflation -- since 1993, while Dominions rate's have increased by 25 percent, virtually all of it for fuel costs.

Which makes one wonder ... why wasn't the power company trying to raise generating capacity through the years, when costs could be added in little by little and at lower rates, instead of waiting until the need reaches critical mass?  That's something lawmakers should be asking all power companies ... now.

Copyright AP - Associated Press
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