RICHMOND, Va., Sept. 2 /PRNewswire/ -- Dominion Virginia Power is seeking permission to reduce fuel rates for its customers for a second time in three months. If approved by the Virginia State Corporation Commission (SCC), this fuel rate decrease combined with one implemented July 1 would offset for residential customers nearly all of the impact of previously requested rate increases that took effect yesterday, Sept. 1.

Dominion's new fuel rate request would lower the bill of a typical residential customer who uses 1,000 kilowatt-hours of electricity a month by about 2 percent, or $2.19 from current rates. Combined with an interim adjustment made in July, total fuel-rate reductions would be about 5.4 percent, or $5.83 a month subject to final approval of the SCC.

In presenting the proposal to the SCC yesterday, the company cited lower costs for coal, natural gas and other fuels used to generate electricity, lower purchased power costs and superior operating performance at its power stations. By law, fuel costs are passed through to customers without profit for the company.

"Fuel costs have continued to decline since we proposed our initial adjustment," said Paul D. Koonce, chief executive officer of Dominion Virginia Power. "We are taking the opportunity to update our pending application while the proceeding is still going on so our customers can benefit sooner from these lower costs."

The company proposes that the additional reduction in the fuel rate take effect Oct. 1, subject to final approval of the SCC.

Dominion Virginia Power implemented yesterday on an interim basis a previously requested base rate increase of 5 percent, or $5.22 a month, for a typical residential customer. That increase is subject to SCC approval before becoming final.

It is the first increase in the base rate in nearly 17 years.

The SCC has authority to adjust the interim rates based on its investigation as well as input from its staff, the state Office of the Attorney General's Division of Consumer Counsel and customers.

Also going into effect yesterday was a separate increase of about 1.1 percent, or $1.11 per month, for a typical residential customer for electric transmission costs. This increase, also previously requested, was approved June 29 by the SCC.

Dominion requested the increases to pay for new infrastructure to meet increasing energy demand, fund improvements in reliability and cover higher costs.

The company's electric rates remain below the national average. Over the past 17 years, the company's rates have increased only about half as much as other goods and services as measured by the Consumer Price Index.

Dominion Virginia Power is a subsidiary of Dominion (NYSE: D), one of the nation's largest producers and transporters of energy, with a portfolio of more than 27,500 megawatts of generation, 1.1 trillion cubic feet equivalent of proved natural gas and oil reserves, 14,000 miles of natural gas transmission, gathering and storage pipeline and 6,000 miles of electric transmission lines. For more information about Dominion, visit the company's Web site at www.dom.com.

SOURCE Dominion Virginia Power

SOURCE: Dominion Virginia Power

Web site: http://www.dom.com/