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Electric News Releases - 1999
October 22, 1999
Increasing Energy Needs Yield Higher Fuel Costs For Virginia
Power
RICHMOND, Va. – Increasing energy needs for a growing Virginia
economy as well as a need to purchase replacement power will lead to higher
fuel costs in 2000, Virginia Power told the State Corporation Commission Friday.
In its annual fuel filing with the SCC, Virginia Power proposed
what would amount to a slight increase in a typical residential customer's electricity
bill. The fuel rate is a pass-through charge to customers for the cost of fuel
used to produce electricity. Any approved savings or increases are passed directly
to customers. By law, the company is not permitted to make a profit on fuel
expenses.
If approved, the monthly bill of a typical residential customer
using 1,000 kilowatt-hours of electricity would increase by $1.56, or 2 percent,
from $78.81 to $80.37, beginning Dec. 1. Even with this slight increase, Virginia
Power's fuel rates have declined 20 percent during the 1990s.
The total proposed fuel rate increase of $86 million is composed
of two parts – a $57 million increase in projected fuel expenses next year and
a $29 million increase to recover actual costs not collected by the fuel rate
for the past 12 months.
The $57 million projected fuel cost increase would be used
to purchase replacement power for expiring contracts and scheduled power station
outages. The increase will also be needed to recover the fuel costs for the
more than 100,000 newly connected or anticipated customers in 1999 and 2000.
The $29 million increase to recover costs not collected by
the fuel rate is largely attributable to the use of higher cost generation and
purchases to replace unavailable generation because of scheduled outages and
the summer's drought.
Virginia Power is a subsidiary of Dominion
Resources Inc. (NYSE: D), an energy company with headquarters in Richmond.
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