HEC Approves Base Rate Increase, Lowers Fuel Costs

Harrisonburg Electric Commission (HEC) customers will soon be paying less on their electric bills despite a newly approved rate increase for the power utility.

The HEC board voted to increase the utility’s base rate for power by 5% at its regularly scheduled meeting on April 23rd, which will affect all readings taken after June 1st. This increase follows a substantial decrease in the fuel factor charges effective May 1st, and will ultimately lead to a net reduction on the average customer’s monthly electric bill.

“Increased rates along with various weather patterns have caused our wholesale power costs to increase significantly,” HEC General Manager, Brian O’Dell, said. “We knew the last rate increase wouldn’t make up the entire difference in our wholesale power cost increase, but thankfully with the decrease in fuel charges, customers will realize a net reduction in their bills.”

The 5% increase affects the base rates only and does not include any fuel or basic customer charges. When all other costs are included, the average residential customer who uses 1000 kWh per month can expect to see their bill decrease by approximately $5.45 per month once both of these changes are in effect.

The lower fuel charges, which dropped from 1.852 cents to 0.807 cents per kWh, will also come as a relief to manufacturers and larger energy consumers in the community who can expect to see a more significant decrease in their bills.

The increase in wholesale power costs is primarily due to expenses being passed from Dominion Energy that are related to the construction of the offshore wind (OSW) project and other renewable energy projects currently under construction, as well as the costs associated with Virginia’s participation in the Regional Greenhouse Gas Initiative (RGGI). The decrease in fuel costs comes in the wake of falling natural gas prices.