Dominion Resources, (NYSE:D) announced Friday that it is requesting a 4.1% rate hike for its Dominion Virginia Power customers to cover primarily the costs of this year's "extremely cold winter." The request stems from this winter's "polar vortex," and the higher cost of fuel that its power stations were forced to swallow as customers cranked thermostats to overcome the cold.
Robert Blue, president of Dominion Virginia Power, was quoted in the press release as saying:
This winter we saw days and weeks so cold -- driven by the 'polar vortex' phenomenon -- that the price of natural gas and purchased power soared. While gas was available, there were pipeline constraints at certain points on the coldest days. Had it not been for our diverse sources of generation, including nuclear and coal, electricity shortages might have occurred and this proposed fuel increase be even higher.
If approved, Dominion Virginia Power residential customers will see their power bills rise over a two-year period, starting July 1. According to the release, a typical residential bill would increase around $4.50, to $112.45 per month. For business owners, that 4.1% hike could have a bigger impact, because fuel costs make up a larger portion of their overall power bills, said the company.
Dominion Resources also filed an additional request to increase its transmission rider by 1.7% ($1.91) starting Sept. 1 "to support the company's continuing efforts to strengthen its transmission network and ensure secure and reliable delivery of power to customers."
Dominion said that, even if these latest requests are approved, its new rates would clock in "well below" state, regional, and national averages.
Justin Loiseau has no position in any stocks mentioned. The Motley Fool recommends Dominion Resources. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.