Charges for electric riding add to the rising costs

Virginians’ energy bills have increased 14.5% since 2022 and doubled in 25 years. But Dominion Energy customers are checking their bills to understand why they may be upset. They only see part of the picture.

The electricity bill shows how much energy customers use, and the utility multiplies that use by various “base charges” — cents per kilowatt-hour used — to cover the costs of production, transmission and fuel for the generators.

But the bill doesn’t include tariffs for many energy and clean energy projects. Known as rate adjustment units, or “riders,” these are the fastest growing portion of the loan.

The utilities say they are doing everything in their power to protect residential customers from the rising price of electricity they buy in the daily markets, mainly driven by data center demand and fuel prices. But the passengers are rising.

In an October report, the State Corporation Commission, which regulates electric utilities, noted that Dominion’s average monthly bill in 2007 was $90.59. This year it is $172, an increase of 90% over 19 years. Passengers were rising by $53 – they are growing 20 times faster than the basic rates. (Dominion’s base rates also increased this year, the first hike since 1992, raising bills by $11.34.)

Dominion has 15 passengers. They are struggling with inflation, supply issues and regulations. They can go down or out, but they usually go up. Last year, six Dominion passengers increased, one decreased, and seven stayed the same, together adding $10 to the average monthly rent, or $120 per year.

About half of the passengers help Dominion handle the rising demand for electricity in data centers.

One charges ratepayers $11.23 a month for Dominion’s share of the $11.5 billion offshore wind project. The fare rose $2.60 last year for regular residential customers. Another rider adds $7.98 to pay for clean energy certificates that Dominion is ordered to buy because it doesn’t produce enough green energy. That fee went up $3 last year.

Upgrading nuclear power plants costs homeowners $3.48 a month. Clean energy projects add $3.67; that fee was $2.19 less than a year ago. Residents pay $1.77 a month to clean up coal plant sites, including Possum Point, a fee that rose 59 cents last year. And on March 1, residents began paying $9 a year more for a new gas peaking plant to handle data center demand.

Transmission upgrades, such as towers and new lines, are sponsored by another carrier, which adds $11.79 to the base transmission fee of $9.70.

Power purchase agreements – contracts to buy energy from foreign companies – and electricity purchased at the daily regional auction are included in the “fuel” category in the accounts alongside diesel oil and coal. All fuel costs are regulated by one major carrier that costs $29.68 per month.

Some fees are not listed even for passengers. Dominion is saving energy for future years, adding $1.98 to base rates this year.

Some riders will grow in design. Subscribers are charged 29 cents a month for the development of a small modular system. As the power plant is built, the rates will increase.

Some riders will get off. A Dominion spokeswoman said the offshore wind fee will begin to decline next year, when the project is completed, and will become a credit in 2031.

Although the passengers are not seen on the bills, they can be found on the Dominion website. (See diagram for access.)

Unlike Dominion, a major investor utility, the Northern Virginia and Rappahannock Electric utilities have no passengers. However, their customers pay for things that are not listed on their bills. Both co-ops charge a monthly service fee — $21.30 for NOVEC and $24.48 for REC — to cover fees, metering, customer service and administrative costs.

That fee has remained stable, but both co-ops are also paying an “energy cost adjustment” that is rising.

Currently, the energy cost adjustment on an average $145 NOVEC bill is $13.20. According to NOVEC officials, it consists of fees for a small biomass production plant, purchased electricity and fees that Dominion charges NOVEC for Dominion’s lines that serve NOVEC’s territory.

Some of those costs are also found in NOVEC’s payments for “supply.” So, in total, a NOVEC customer pays $9.94 for Dominion’s transmission lines, $15.40 to save future energy, plus other fees, company officials said.

Capacity prices hit the headlines in 2025 with energy storage prices for 2026-2027 rising 800% over last year. Those costs are starting to show up in the bills.

But utilities are also buying power in daily auctions, and prices are also rising.

“The development of the service center is the main reason for … the imbalance of supply and demand and high prices,” wrote Independent Market Monitor, an environmental watchdog, in a March report. These prices had risen by 50% between 2024 and 2025.

All of this increase goes into everyone’s debt.

Officials at all three utilities said their companies have taken steps to prevent ratepayers from the big increase. Dominion realized that since it produces most of its energy, it does not need to buy much from the auction, so the energy bill was kept at $1.98 per month. However, consumers pay the riders to generate that energy.

NOVEC says it enters into long-term contracts with generation plants and does some hedging to keep prices as low as possible for residents, something it does not do for data centers, whose rates reflect the rise of the daily market. The company says that all of its data center fees are up 76% from 2023, while residential fees are up just 3.3%.

“NOVEC customers pay among the lowest rates in the country,” said Katherine Bond, vice president for business operations.

That said, no one expects electricity costs to drop. Fuel costs are exacerbated by the war with Iran and record hot and cold temperatures.