Due to increasing costs and flat sales since 2009, Central Virginia Electric Cooperative plans to file a request with the Virginia State Corporation Commission to increase rates by 6 percent to 7 percent, according to a letter from CVEC’s President and CEO Gary Wood to CVEC customers this month.
The proposed rate increase could go into effect as early as October and it is not connected to new initiatives, such as CVEC’s proposed broadband and solar initiatives, Melissa Gay, communications and member services manager, said in an email last week.
CVEC has proposed a $110 million initiative to offer 36,000 CVEC electric customers in 14 counties in Central Virginia — including 8,900 in Nelson County — the option of purchasing internet access within five years after CVEC starts building the network. CVEC also has proposed a Solar Share program, which is set to offer solar energy to customers beginning this year, pending approval from the SCC, Gay said in an email.
CVEC, which is based in Colleen, and Charlottesville-based Coronal Energy agreed to a power purchase agreement that states Coronal Energy will construct and own the solar panels to sell solar power to CVEC, which will offer solar energy to its customers, Gay said via email.
“We have several new programs at CVEC and want to be sure that those new initiatives are not linked to the rate increase,” Gay said in the email. “CVEC is regulated very closely by the Virginia State Corporation Commission and the rate increase must be approved by them. They will not permit CVEC to increase rates to help pay for our community solar program, Solar Share, or
the new fiber optic network.”
CVEC, which intends to file a general rate application with the SCC around June 29 to increase rates, has taken a number of steps to offset costs since 2010, Wood said. Those steps include offering early retirement to its employees, refinancing debt and reducing bad debt write-offs, according to Wood’s letter to customers, which also states staff efforts have worked to increase the annual budget less than one half percent for the last three years. In 2018, transmission rates charged by Appalachian Power Co. and Dominion added $6 million in additional expense, according to Wood’s letter.
“CVEC now must increase margins to maintain a sound financial position and to continue our present programs, including regular capital credit rotations,” according to CVEC’s notice.
Since 2010, more than half of the increases in rates since 2010 have been used to pay for new investments in increased reliability and increased capital credit funds, Wood said in an email Friday.
As a not-for-profit cooperative, CVEC refers to its electric customers as members. Revenue CVEC receives beyond what covers costs remains the property of members and at the end of the year CVEC allocates that revenue either to be returned to members or to be used to maintain and improve the distribution system, according to CVEC’s website.
Since CVEC began offering capital credit funds in 2010 to its members, it has returned nearly $10 million to its members, Wood said in an email.
Once the rate is finalized, CVEC will publish another notice, Gay said in an email.
CVEC will provide more information as it becomes available, including how the commission accepts public input during its review of the application, according to CVEC’s notice.