“I am pleased that, with the continued efforts of all of the parties in this case, an outstanding result has been achieved. We look forward to the commission’s consideration and approval of the settlement. This is good for Dominion’s residential and business customers here in the Commonwealth,” said Attorney General Cuccinelli.

“The Attorney General’s office represented the consumers in this settlement, but at the same time, with this agreement, Dominion still has the opportunity to make a fair profit for the necessary and valuable service it provides to the residents and businesses of Virginia,” Cuccinelli continued.

If the settlement is approved by the SCC, a residential customer using 1,000 kilowatt hours of electricity per month would see his monthly bill drop from today’s approximately $108 to approximately $99, through the end of this year.

In addition, Dominion would pay the typical residential customer one-time credits of approximately $84, with the actual amount depending on the timing of the SCC’s final order. These credits include $24 for the return of Financial Transmission Rights (FTR) fees, approximately $42 plus interest in refunds for all of the interim base rate increase that took effect September 1, 2009, and approximately $18 in “catch up” credits that offset the previously approved increases in rate adjustment clauses.

In January 2011, monthly residential bills would change to approximately $103 for 1,000 kWh of electricity, subject to any adjustment in the fuel charge and approval of a proposed conservation rate adjustment clause.

The settlement amends and expands upon the terms of a November 5 Stipulation and Recommendation among Dominion, the Office of the Attorney General’s Division of Consumer Counsel, and six industrial and commercial customers of the utility: Gerdau Ameristeel Corporation (Chaparral Steel), MeadWestvaco Corporation, Wal-Mart, Kroger, the Apartment and Office Building Association of Metropolitan Washington, and International Paper Company.

Today’s amended Addendum and Modification of Stipulation and Recommendation (an amended stipulation) now includes the staff of the SCC, the Virginia Committee for Fair Utility Rates (a group of large industrial customers), federal executive agencies, the Fairfax County Board of Supervisors, and all other parties in the case before the Commission.

In the rate application filed in March 2009, Dominion was seeking a $243 million base rate increase (revised from $250 million). The November 5 stipulation called for elimination of the entire requested rate increase and the return to customers of $268 million. This $268 million would be in the form of monthly credits to offset previously approved “rate adjustment clause” increases for certain non-base rate items, such as costs for new power plants under construction.

The original stipulation also included the return of $129 million to customers (in the form of lump sum credits to residential customers and monthly credits to commercial and industrial customers) from certain prior period fuel-related items, including revenues on Financial Transmission Rights.

The SCC’s evidentiary hearing on Dominion’s application for a base rate increase concluded at the end of January. The November stipulation preserved the ability of the commission’s staff and other parties that were not part of the original proposed settlement to litigate issues at the hearing, and to continue to negotiate with Dominion and the original signatories in an effort to reach a comprehensive settlement among all parties in the case.

The amended stipulation provides an additional $329 million in rate concessions from Dominion, bringing the total benefits to customers to $726 million.

Dominion agreed to credit base rate charges in 2011 and 2012 by $66 million in each year for a total of $132 million, and to freeze its base rates through December 1, 2013. In addition, beginning January 1, 2011, the company will forego recovery of $197 million for more than eight years in historical costs related to joining the PJM regional transmission organization. Recovery of these costs was being challenged in the U.S. Fourth Circuit Court of Appeals by the Attorney General’s office and the SCC. The original stipulation provided for a return-on-equity (ROE) of 11.3% plus a 0.60% performance incentive. The amended stipulation specifies that the combined 11.9% ROE is to be used for measuring Dominion’s 2009 and 2010 earnings in the first biennial review in 2011.