Dominion Energy’s planned rate hikes could have residential customers paying 15% more over the next two years.
In late March, Virginia’s largest utility company asked the Virginia State Corporation Commission for a base rate increase of $8.51 monthly in 2026 and $2 per month in 2027 for a “typical residential customer.” The company said their residential rates have increased approximately 40% lower than the inflation rate over the past decade.
Dominion’s requested rate change, added to the fuel cost of extended cold weather in January 2025 and “higher forecasted fuel commodity prices,” will “result in a $10.92 monthly fuel rate increase for a typical residential customer.” The total rate includes “the scheduled expiration of a $3.99 fuel credit from a previous fuel case.” According to Dominion Energy, it does not profit from fuel or power capacity costs.
Dominion Energy, headquartered in Richmond, provides regulated electricity to 3.6 million homes and businesses in Virginia, North Carolina, and South Carolina. The utility company describes itself as “one of the nation’s leading developers and operators of regulated offshore wind and solar power and the largest producer of carbon-free electricity in New England.”
In Virginia, if Dominion Energy’s rate hikes are approved, the new fuel rate will take effect on July 1, and the new base rates will take effect on Jan. 1, 2026, and Jan. 1, 2027. The approval process takes six to nine months so residents can plan and budget accordingly.
If state regulators approve Dominion’s requests, an average residential bill of $140 would jump to $161.43 after January 1, 2027. The State Corporation Commission regulates utilities in Virginia and would have the final say on a rate increase.
“Dominion has submitted its request but a hearing has not yet been scheduled by the Commission. Since the SCC has not held a hearing or made a ruling, we do not have anything to share regarding any potential effects of costs on ratepayers,” said Greg Weatherford, Deputy Director of Information Resources for the Virginia State Corporation Commission.
“The SCC’s three Commissioners will set dates for a hearing in the SCC’s courtrooms and a schedule for accepting evidence such as statements from the company, other stakeholders and the public. All this will be entered into the record. The public will be able to submit statements at that time. The hearing will be public and the audio streamed live online,” continued Weatherford.
The SCC’s decision could be to accept Dominion’s request “in part or in whole” or to “reject it in part or completely.” The SCC can also determine how Dominion charges costs or manages programs if it is in the “best interests of the Commonwealth.”
In a statement, Dominion Energy Virginia said proposed rates “reflect the increasing cost of labor, materials and equipment, power capacity and fuel, as well as grid upgrades to reliably serve customer growth.”
If the rate hikes are approved, it will be the company’s first base rate increase since 1992.
Dominion Energy also proposes a new rate class for high-energy users, including data centers, and additional consumer protections.
“The proposed rate changes apply to all customers, including large companies, not just residential customers,” a Dominion Energy spokesperson told the Fairfax County Times.
The company said the rate hikes are a reaction to “inflationary pressures” since 2023. Such pressures stemmed from increases in the cost of labor, materials, and equipment, such as “cables and wires, utility poles, transformers and power generation equipment.”
Beyond the pressures of inflation, Dominion Energy Virginia cites needed investments to “reliably serve a growing customer base.”
“Our customers are using 5% more power each year, so we are upgrading the grid to generate and deliver more power. Upgrades include increasing the generating capacity of several of our power stations and expanding the distribution grid to serve new customers,” a Dominion Energy spokesperson told the Fairfax County Times.
“We’re focused on providing exceptional value for our customers every single day,” said Ed Baine, president of utility operations and Dominion Energy Virginia.
“Outside of major storms, we deliver uninterrupted power 99.9% of the time, and we’re significantly reducing storm-related outages as well. This proposal allows us to continue investing in reliability and to serve our customers’ growing needs,” said Baine.
“We know our customers are feeling the impact of inflation in other areas of their lives, and some of our customers may need assistance with their power bills. We’re here to help,” he said.
Dominion Energy offers a multifaceted program called “Energy Share. ” This program provides financial support, including $300/year in cooling assistance and $600/year in heating assistance, and efficiency upgrades to lower costs.
Dominion Energy urges customers to call or visit its website if they need assistance paying their bills or increasing their energy efficiency with Energy Share.
“Our Energy Share program not only offers among the most supportive bill assistance in the country, but also provides free home energy efficiency upgrades to help lower your energy use and save on your monthly bills,” said Baine.
To promote “rate stability,” Dominion Energy also proposes to “move power capacity costs from the base rate to the annual fuel rate.” PJM establishes these power capacity costs, the regional electric grid operator, and is assigned to Dominion Energy. According to the company, power capacity costs “reflect the increasing demand for power throughout the region and the company’s service territory.”
While planning for rate hikes and a new rate class for “high energy users,” Dominion Energy said it would be committed to “reliable,” “affordable,” and “clean” energy.