SCC: Dominion Virginia Generation Earned $376 Million In Excess Of Base ROE In 2018

The Virginia SCC released a report stating that, in 2018, Dominion Virginia's Generation segment earned $376.3 million above the base Return on Equity of 9.2% that was most recently approved by the Commission for Dominion's RACs (rate adjustment clauses)

Dominion Virginia's Earned Return on Equity for Generation was 20.19%, the SCC said

Under prior statute, Dominion Virginia could have been required to refund up to $379 million in over-earnings (the amount reflects two years of over-earnings as well as the impact of under-earning in distribution), but under statutory changes, the amounts may instead be applied to future investments. Dominion said that it has already identified more than $750 million in necessary spending for offshore wind pilot and smart meters

The SCC also raised concern about Dominion Virginia's stated future capital investments totaling $12 billion. Of this total, about $6 billion is related to generation.

The SCC noted that Dominion Virginia projects that certain factors will mitigate the projected rate increase by 2023, citing to: (1) projected offsetting decreases due to declines in rate base resulting from recovery of previously approved projects; and (2) projected significant decreases to fuel costs driven by natural gas and renewable generation, projected decreases to commodity prices, and fossil fuel plant retirements.

"The Commission believes that some of these mitigating factors may be likely to happen but some are speculative," the SCC said