Monday, February 14, 2011

Dominion Virginia Power EV Rates Revealed (Part 1)

You could save $200 or more by switching

You could save $200 or more by switching to one of Dominion Virginia Power's EV rates.  That's the result I get from over a week pouring through the complexities of Dominion's rate structure.  Of course, it's all contingent on Dominion's new EV Rate Proposal being accepted by the State Corporation Commission later this year.  Why, in a Commonwealth, we call it the State Corporation Commission, I'm stymied, but I digress.

Of course, that $200 is in addition to the $2,000 per year I could save by switching to an efficient EV since I estimate my annual petroleum fuel cost to be about $2,500.  I drive about 75 miles per day and with fuel at $2.99 910 and consuming 16 gallons per week, the costs add up quickly.  Compare this to an EV like the Nissan LEAF at only about $550 per year under current household electricity rates and you can see why I want to switch.

But that's under Dominion Virginia Power's Residential Schedule 1 rate, with all riders, taxes and fuel accounted for.  So why does this differ from my previous calculations of $300 or so under Schedule 1 where I deduced 7.033¢kWh in the Summer and 4.187¢kWh in the off-seasons?  As you can see from the official filing, those rates are correct under that schedule.  There's also the monthly distribution cost and the lower than 800 kWh rates, but I'm assuming those are taken up by my household's electricity costs.  Unfortunately, I never go under 800 kWh in even the lowest power months.

Yet I come up with a cost per kWh of 9.133¢, averaged over the entire year.  Remember, the off-season rate is valid for twice as only as the Summer rate so if anything, my costs should be less than 7¢ for every kWh, not 2.1¢ more.  In fact, if the cost were averaged over the entire year at those rates, the average cost per kWh would be just under 5.138¢, a nearly 4¢ difference.

The missing 4¢

The Dominion Virginia Power electricity rate schedule is actually broken up into 6 to 7 sections: Distribution, Supply, Transmission, Fuel, Sales and Use Surcharge, Consumption Taxes and occasionally Local / County Taxes.  Each of these are outlined below and then summarized.


The distribution costs of your Dominion Virginia Power bill are broken into 4 parts:

What this comes down to is that the distribution line item of your bill is the sum of these 4 parts, the first 2 coming from the Schedule 1 or related rate schedule above, and the second two coming from additional riders on your bill for the purposes specified in the rider.  In the case of the Peak-Shaving rider, this comes out to 0.009¢kWh, and for the Energy Efficiency rider, there's an additional 0.044¢kWh.  That makes a total of 0.053¢kWh additional charges on your distribution.


The supply or generation costs of your Dominion Virginia bill are also broken into 4 parts as of this writing:

As before, the total supply charge is the sum of these 4 items.  The first part comes from the Schedule 1 or related schedule under the section labeled Generation.  The second and third are the Virginia City Hybrid Energy Center rider at 0.280¢kWh and the Bear Garden Generating Station at 0.117¢kWh.  Finally, you have the Base Rate Credit, which, as the name implies, is a rebate on the cost of the base rate schedule.  This credit is a new rider for 2011 and is different depending which base schedule is being used: -0.132¢kWh for Schedule 1, -0.128¢kWh for Schedule 1T and -0.101¢kWh for Schedule 1S; it's not clear at this time what Base Rate Credit, if any, will be received under the new Schedule 1EV rate, but more on that later…

So, under Schedule 1, the total cost of all 3 riders is 0.265¢kWh.


The transmission costs of your bill come directly from Rider T: Transmission.  The cost for electricity transmission is therefore given by 0.616¢kWh.


The cost of fuel for electricity generation is given by the Fuel Charge Rider A.  As would be expected, the cost of fuel is rather volatile; in the last 10 years, it's changed 8 times, though it's been steadily decreasing since July 2008.  As of this writing, it currently stands at 2.803¢kWh.  Thus, the cost of fuel is clearly the more than half of the additional 4¢ charge.

Sales and Use Surcharge

The Sales and Use Surcharge is a tax on electricity usage levied by the Commonwealth.  It's rated at 0.056¢kWh.

Consumption Taxes

The consumption taxes are by far the most complicated part of the Dominion Virginia Power bill to calculate.  First of all, this tax is actually made up of 3 different taxes: the State Consumption Tax, the Special Regulatory Tax and the Local Consumption Tax.  What complicates things is that, like the Schedule 1 rates, there's a tiered basis to these taxes.  If your total electricity usage in a given month is less than 2.5 MWh (remember, a Megawatt is 1,000 kilowatts), the tax summed over all 3 components comes in at 0.155¢kWh.  But, if you use more than 2.5 MWh, but less than 50 MWh, the summed rate reduces to 0.099¢kWh for all electricity usage above 2.5 MWh.  After 50 MWh, it goes even lower, but I doubt many homes are using 50 MWh in a month; I don't even use that much electricity in a year!

As it happens, last year I dipped into the 2.5 MWh range during all 4 of the Summer months, a total of 122 days under the Schedule 1 definition (June, July, August and September).  So in these months, my EV would have been taxed at the lower rate because of the large amount of electricity usage, but in the off-season months, it would be charged at the higher rate.  If one averages the two rates out, based on 122 days of the year for the lower rate and the 243.2425 off-season days (in the Gregorian Calendar) I therefore pay about 0.136¢kWh for the tax on average.

Local / County Taxes

Each county in Virginia has the option to apply an additional tax on top of the other taxes and surcharges.  For instance, in Fairfax County, where I live, the tax rate is 0.605¢kWh.  The difference with the county tax is that there's a minimum charge of $0.56 which effects any total usage under 93 kWh.  There is also a tax rate cap at $4.00, or about 661 kWh, so that there's no tax for any electricity usage above that limit.  As all of my current household monthly loads are in excess of 661 kWh (and even of the 800 kWh of Schedule 1), I don't expect my EV would incur any additional Fairfax County tax since I'm already paying the $4.00 on the base load.

The 4¢

By adding each of the 7 sections above, not including those already calculated as part of the Schedule 1 rate, you have a total of 3.929¢kWh, or just under 4¢

In the name of fairness, however, I should point out that there's a 0.066¢ discrepancy between the average result above and this result.  I assume this has to do with rounding errors because verifying against my internal calculations for each subsection, my numbers agree with those posted in the 7 sections above.

More to come…

In the second part of the Dominion Virginia Power Electric Vehicle rate proposal series, I'll be covering the details of the new Electric Vehicle rates and how they would effect a typical EV user like myself and what it's like to live under a Time-Of-Use rate.  All that and more, coming soon!

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