On May 1, Dominion Energy Virginia filed an application to increase its fuel recovery rider, called the “fuel factor.” Dominion’s fuel factor consists of a “current period” recovery factor and a “prior period” recovery factor. For the current period, Dominion projects fuel expenses of approximately $2.69 billion during the next rate year. For the prior period recovery factor, Dominion reports an unrecovered balance of approximately $1.1 billion. Dominion states that approximately $567 million of the unrecovered fuel balance was incurred during January 2026 “as a result of the extremely cold and prolonged winter.”
Dominion states that, although it is entitled to recover all of its projected current period and prior period fuel expenses over the next rate year, the utility intends to file an application to “securitize” a portion of its fuel expenses. Dominion cites 2026 legislation that allows the SCC to approve a special purpose entity to issue bonds to refinance some or all of the utility’s unrecovered fuel balance. Dominion states that it intends to file an application, pursuant to this legislation, later this year. Dominion argues that “the proceeds from these bonds would be used to satisfy the unrecovered fuel balance and reduce the near-term impact on customers from paying these costs over a shorter period of time.”
Dominion, citing the potential to securitize a portion of the pending fuel charges, presents two options for the Commission’s consideration. Dominion’s “Standard Recovery Option” would recover all current and prior fuel charges over the next rate year. Dominion estimates that the Standard Recovery Option will increase the monthly bill for a typical residential customer using 1,000 kWh by $21.79. Dominion also presents a “Securitization Option.” Under the Securitization Option, Dominion would be permitted to implement interim fuel rates, subject to a future decision on securitization. Under the Securitization Option, a typical residential customer would experience a monthly bill increase of about $7.97 beginning on July 1, 2026, and an additional securitization charge of approximately $1.80 per month beginning on January 1, 2027.
The SCC published a procedural schedule for this case on May 26. The SCC will hold an evidentiary hearing on August 11.
