Working on a Dominion Energy Virginia audit and noticed some unusual charges showing up in the delivery portion of the bill starting in March. Client switched suppliers in February and there are these $0.003/kWh adders that aren't clearly explained. The bill just says "Administrative Cost Recovery" but it feels like they're passing through switching-related costs. Anyone familiar with Dominion's tariff Schedule RG-1? The language is vague about what gets included in administrative costs.
Virginia - Dominion switching costs buried in delivery charges?
Bill - I've seen this with other Dominion accounts in Virginia. They started implementing these "administrative cost recovery" charges around 2017 when shopping activity picked up. Supposedly covers costs related to customer information system updates, supplier coordination, etc. The SCC approved it but the cost allocation methodology is questionable. Some accounts see it, others don't, and there's no clear pattern based on usage or rate class.
This is exactly the kind of stuff that makes customers want to avoid switching in the first place. Here in Oklahoma we don't have retail choice but I've worked with clients in other states and it's always something. Either the supplier is hitting them with hidden fees or the utility is adding mysterious delivery charges. Virginia's supposed to have decent oversight through the SCC but these administrative charges seem like a way to discourage shopping.
Ed raises a good point about discouraging shopping. We've got Duke Energy here in North Carolina and they pulled similar tactics before retail access was suspended. The utilities don't like losing their generation revenue so they find creative ways to recover costs from shopping customers. Bill, I'd recommend filing an informal complaint with the Virginia SCC. Even if you don't win, it puts them on notice that someone's watching.
Wayne - good advice on the SCC complaint. Dale, you're absolutely right about the cost allocation being questionable. I looked deeper into the tariff and found that Schedule RG-1 allows for "reasonable administrative costs associated with customer choice programs" but doesn't define what's reasonable. The client is seeing about $400/month in these charges on a 2 MW load. That seems excessive for data processing and supplier communication.
Bill, $400/month on 2 MW is definitely high. That's $200/MW/month just for administrative overhead. For comparison, CenterPoint here in Texas charges about $50/MW/month for their competitive retail provider coordination services and that covers a lot more than what Dominion is claiming. Virginia customers are getting taken for a ride. The SCC needs to do a better job reviewing these cost recovery mechanisms.
This thread is making me grateful we're still regulated here in Georgia. Yes, Georgia Power has their issues but at least we don't have to deal with supplier switching costs and mysterious administrative charges. The complexity of these deregulated markets is getting out of hand. Customers need a PhD in utility regulation just to understand their bills. Bill, definitely file that complaint - even informal complaints get attention from the commission staff.
Update: Filed the informal complaint with SCC last week and already got a response from their staff. They're asking Dominion to provide cost justification for the administrative charges. Apparently we're not the only ones questioning these fees. The staff attorney mentioned they're seeing similar complaints from other large customers. Might be worth checking if any of your Virginia clients are seeing these charges too.
Bill - thanks for the update. I've got a client in Richmond that switched suppliers in June and I'll definitely check their September bills for these administrative charges. It's interesting that SCC staff are seeing multiple complaints. That suggests this is a broader issue with Dominion's cost recovery practices. In Wisconsin we've got retail choice for large customers but our PSC is pretty strict about utility cost allocation. Sounds like Virginia needs to tighten up their oversight.
Glen makes a good point about PSC oversight. The problem with Virginia is that Dominion has a lot of political influence and the SCC sometimes goes easy on them. But customer complaints can definitely make a difference, especially when there's a pattern. Bill, any word on whether SCC staff are opening a formal investigation into these administrative charges? That would put real pressure on Dominion to justify their cost allocation methodology.
This whole situation reminds me of the early days of Texas deregulation when TXU was adding all kinds of creative charges to delivery bills. Eventually PUCT cracked down but it took years and lots of customer complaints. Virginia's deregulation is still relatively new so there are bound to be growing pains. The key is making sure utilities don't use the transition as an excuse to gouge customers. Bill, keep us posted on how the SCC responds.