Pepco filed a request for a rate increase in Maryland on October 14, 2025. Pepco’s request actually consists of two different rate applications, one based on an historical test year for $142 million increase, and the other based on a fully forecasted test year for $133 million increase.

Work on this case has begun since the first hearing date is scheduled for November 18, 2025. In preparation for that hearing, AOBA has filed a Motion to Dismiss/Reject Pepco’s Application or portions thereof. Pepco proposes that new rates become effective April 10, 2026.

However, it is unlikely that rates will increase before August 10, 2026. AOBA is reviewing this complex filing, but preliminary estimates anticipate rate increases for commercial customers between 23% – 29%, if not more.

AOBA and AOBA Alliance will be hosting a Utility Briefing and Energy Market Update on Wednesday November 19, 2025 at 11 AM where we will discuss the latest Pepco MD rate increase filing and other pending rate cases in MD, DC and VA. Additionally, Constellation will provide an update on energy markets.

Case PUR-2025-00091

On July 31, 2025, Washington Gas filed an application with the Virginia State Corporation Commission on June 29, 2022 requesting an increase in rates of $65.3 million, in addition to the transfer of $38.7 million of the costs of investments in infrastructure replacements made pursuant to the Company’s Steps to Advance Virginia’s Energy Plan (“SAVE Plan”) from the SAVE Rider to base rates, i.e., a total increase in rates of $104.0 million.

The preliminary review of the revenue request notes that the average increase in distribution costs for members is 30-35%, which would result in a approximate 15-20% increase in total Washington Gas Virginia bills beginning in January 2026.

AOBA will intervene in the rate case and provide more information for members as the case proceeds.

AOBA will be hosting a Utility Rate Case and Energy Market Update on August 21, 2025 at 11AM (virtual).

https://www.aoba-metro.org/events/utility-committee-meeting-august2025

Dominion Files Updated Fuel Charge –to be effective on an interim basis beginning July 1, 2025,  

Order Establishing Fuel Factor Proceeding issued May 12, 2025

April 11^th Clarifying Letter

Dominion filed its annual fuel factor rate updatebeginning July 1, 2025 through June 30, 2026 in Virginia on March 31, 2025. The fuel factor rate, if approved, will be in effect from July 1, 2025 through June 30, 2026.  Dominion projects fuel costs of $1.958 billion, including energy related fuel and capacity related purchased power expenses, for the coming fuel year combined with a prior period under-recovery of $204.5 million for a total revenue requirement of $2.1628 billion.  The Fuel Factor is collected on customers’ bills under Fuel Charge Rider A.  (See below).

Dominion is proposing a change to the components and calculation of the Fuel Factor beginning with this fuel year.  Dominion has proposed adding a capacity component to the annual fuel factor.  Dominion is requesting a change to the recovery of capacity costs incurred, which have been historically collected through base rates in Virginia.  The proposed 2025 fuel factor is $0.02968 per kwh energy charge plus an additional kwh or kw demand charge depending on your rate class and load factor.  The additional charge pushes the residential fuel charge to $0.031664 per kwh and commercial customers can expect a similar charge on their bills.  (See chart below). For comparison, last year’s fuel charge was $0.020735 per kwh.  This new charge, if adopted, represents over a 50% increase in the fuel charge.  AOBA reviewed a sample building, and the new fuel rate would represent an approximate 8-10% increase to the total bill. 

In its Application, Dominion proposed that the capacity expense changes become effective with the new base rate changes in the biennial review beginning January 1, 2026, and include approximately $120 million of purchased capacity expense incurred from January 1, 2026 through June 30, 2026 in the fuel factor.

However, on May 12, 2025, the SCC ordered that “a total fuel factor rate of 2.9680 cents/kWh, with no capacity component, may be placed into effect on an interim basis for usage on and after July 1, 2025.”  The SCC excluded the proposed capacity component adjustment of the fuel factor pending its decision in the biennial review.  The current fuel charge is 2.0735 cents/kWh and will increase on an interim basis to 2.9680 cents/kWh – a 43% increase. The fuel factor rate ultimately approved by the SCC could be higher than the interim fuel factor rate if the Company’s proposal to move capacity-related purchase power expenses from base rates to the fuel factor is approved. The SCC determined that a procedural schedule for this fuel factor proceeding should be combined for all purposes including discovery, pre-filed testimony and hearing dates, with the Dominion Biennial Review.   Testimony is scheduled to be filed in both cases in July and August, with hearings to begin September 2, 2025.

Dominion Filing  

The Virginia State Corporation Commission established a procedural docket combining both the fuel factor change and the biennial review of rates, to the extent possible, to expedite the process.

Dominion’s request for revenue requirement approval in calendar years 2026 and 2027, for notices purposes, assumes that the purchased capacity expense recovery remains in base rates and is not transferred to the fuel factor as of January 1, 2026.  Once the Commission rules on moving capacity charges to the fuel rate from base rates, Dominion will update its revenue requirement, so there is no double-counting.

In the interim, the Commission has permitted Dominion to update the fuel factor, effective July 1, 2025 to $0.02968 cents per kwh, which does not include any capacity components.  For reference, the current Fuel Factor is $0.020735 per kwh for all rate classes, a 43% increase.

Dominion filed a request for a $458 million base rate increase beginning January 1, 2026 and an additional incremental increase of $173 million beginning January 1, 2027 in Virginia (excluding capacity expense) on March 31, 2025.

Order for Notice and Hearing issued April 24, 2025  
DVP Application filed March 31 2025

Dominion filed its 2025 Biennial Review pursuant to Virginia’s updated ratemaking statute, the Affordable Energy Act.  The Company is proposing a 10.09% Return on Equity which is well above industry medians, with a capital structure that relies on more than 52% equity. This proposed capital structure increases Dominion’s revenue requirements and shifts financial risk onto customers. Dominion has proposed a fundamental shift in cost allocation using the Average & Excess (A&E) methodology. This change disproportionately reallocates fixed and demand-related costs onto commercial rate classes, especially GS-3 and GS-4. A new GS-5 rate class is being introduced for exceedingly large customers with more than 25 MW of load, offering long-term contracts, minimum bills, and exit fees that shield the Company from usage volatility.

Revenue Rebalancing and Rate Increases

In addition to the above, Dominion characterizes its $67 million revenue shift from generation to distribution charges as “revenue neutral,” which is only true from the utility’s perspective. For customers, particularly commercial customers, the revenue shift results in real and material bill increases. Overall, the combined proposed distribution and generation rate increases for all customer classes is as follows:

These increases are not based on new service costs but instead reflect Dominion’s internal revenue reshuffling, and do not include the changes in the fuel rate and the anticipated  capacity charges from PJM procurement.

Efficiency Disincentives and Market Distortion

The Dominion proposal penalizes conservation by increasing reliance on fixed charges. It weakens price signals that support energy efficiency and demand-side management, undermining the Virginia Clean Economy Act. Low-usage customers may see their bills increase, while high-consumption customers, especially those in GS-5, may benefit.

Statutory Conflicts and Ratemaking Deviations

The rebalancing proposal circumvents Va. Code § 56-585.1A, which prohibits rate increases during a biennial review.  Dominion’s filing applies changes across nearly all tariffs, including adjustments not tied to class cost-of-service analysis. The 2021 rebalancing referenced by Dominion was part of a non-precedential settlement and tied to customer credits, not comparable to this proposal.

Disproportionate Impacts on Commercial Customers

Mid-sized commercial customers are caught between the protections of GS-5 contracts and residential rate smoothing. These legacy customers bear increased risk and cost exposure without meaningful offsets. Dominion’s proposal prioritizes its financial insulation over customer cost stability and affordability.

Conclusion

Dominion’s proposal is not merely a technical rate adjustment; it represents a fundamental shift in risk allocation. Commercial customers are being asked to subsidize speculative load growth while absorbing new pricing instability. AOBA intends to urge the Commission to reject these changes and preserve fairness and affordability in the ratemaking process for AOBA members.

[1]      Dominion Witness C. Alan Givens, CAG, Schedule 1, pages 3 and 6.