Dominion Power overcharged its customer $524 million, according to this article.
The commission staff found that Dominion had earned much more than it needed in order to make a reasonable profit in 2008. They determined that the company’s return on average equity, a measure of profitability, was 19.12 percent last year. Dominion should be earning a 10.2 percent return, according to their calculations.
According to this table, electric utility companies in the east average 12.87% ROE so Dominion’s 19.12% was really out of line.
Now aware of the excess earnings, the question is what to do about it. There seems to be a difference of opinion on this.
I think it’s a no-brainer.
Try pressing the easy button: give the money back.
They are a regulated utility for a reason. If they are allowed to make more than a reasonable profit, what’s the point of regulating them?
UPDATE: Dominion, predictably, says the state’s ROE is too low and wants us to pay higher rates. They argue the rate should be between 11.8% and 13.6%, like that of other utility companies in the Southeast.
VIVIAN J. PAIGE | All Politics is Local 
I read the article, and ugh! To paraphrase: “Utility regulation is complex and we had a lot of bills to pass, wah, wah, wah!” You pass a huge, sweeping bill to fundamentally alter the electric utility market in Virginia; and oops, you didn’t understand the “nuances” of the regulation you passed. Wow! Maybe the next time Dominion writes legislation for them, they’ll read it more carefully.
Certain utilities are (or were) required to conduct earnings tests and if their earning were above the allowed return, they had to refund the overage in rates over the next 12 months. We could slap Dominion with that. An annual filing with the commission of this type would ensure that a repeat does not occur. Or if they were on a Performance Based Rates Plan, they would get to keep some of the overage as determined by the performance metrics in their plan.
I have said to many of my friends and family that the Dominion Power is a ripoff. I live in a big house and just moved here last year and i got my first light bill which was a little over 600 dollars. I then didnt think to much of it because it is me and my children and mom in the house. Then I resorted to the budget bill and have been paying what was asked of me and I asked myself when it is not a budget anymore. My bill has been reevaluated this month and it went from me paying 333.00 to 458. that is ridiculous and that is a 125.00 hike and i used less kilowatts this time than i did last month and I thought they would evaluate it by the usuage. How could it have been raised if I used less last month. And when I asked about it the representative gave me a story of jibberish. I guess she didnt give me a direct answer. Now I have a light bill of over 1700 dollars and still on the budget but how can I continue to make it like this. A single parent and three kids. It is also a charge on the bills that I dont understand like fuel I dont use any fuel I have total electric. I dont understand.