2024 Rate Revision FAQs

Projects filed with SVEC after April 2024 will be subject to a new line extension policy. Anyone with questions about the cost impact of the changes should contact a field engineering representative (FER) in their local district.

SVEC filed its rate case application to the SCC on Jan. 2, 2024. The case number is 2023-00207 and documents can be viewed on the SCC's website.

Electronic copies of these documents may also be obtained, at no charge, by submitting a written request to the Cooperative’s counsel:

tbiller@hunton.com

In Virginia, utilities like SVEC are regulated by the SCC. The most common path to changing rates is through a “rate case,” or filing, with the SCC. If SVEC were to propose a decrease in rates, the same approach of making a request to the SCC would take place.

SVEC used the services of a third-party consultant to review current rates.

The consultant’s recommendations were presented to SVEC’s Board of Directors, which passed a resolution to pursue the rate revision in October 2023.

The consultant’s recommendations are reflected in the SCC filing.

With the 2024 rate change, SVEC anticipates it being several years before another increase is needed.

There was a rate increase in 2022 that was larger in scope and coincided with an unexpected increase in ODEC’s PCA. It raised residential bills an average of about $18 per month.

While the last increase went into effect in May 2022, SVEC’s filing for those changes with the SCC were based on numbers from March 2019 through March 2020.

Inflation since January 2021 has put more pressure on the cooperative, which, as a not-for-profit utility, can only rely on revenue through the timely payments of members (i.e., there are no investors who inject cash into our operations).

The 2022 rate revision was SVEC’s first change in rates since 2014, and it was pursued, in part, to help fund the advanced metering infrastructure project, installation of a fiber network and administrative costs associated with introducing new programming, such as community solar.

Since our last rate increase in 2022, SVEC has continued to see increases in our costs of service consistent with the increasing operational costs in the utility industry and economy in general.

The 2024 increase will provide funding that offsets the increased cost of doing business to maintain a high level of reliability on our system.

The additional funds will go toward maintenance and construction of electric infrastructure expenses, such as poles, copper wire, transformers, etc.

• The increase will not create new rate structures or programs not currently supporting reliability and service.

The variable distribution charge, as the name suggests, will vary based on a member’s use. Those who use more will pay more through the variable distribution charge.

• It’s basically fuel (i.e., power) for someone’s home.
• Similar to filling up at the gas tank, you control how much you pay through this charge. The more you use, the more you pay.

The variable distribution charge serves to fund operating expenses the co-op incurs related to use of our infrastructure (poles, wires, towers, transformers, conductors, etc.).

The two charges that comprise the “Distribution Subtotal” are what funds SVEC operations (equipment, staffing, everything). Combined, they are the cost to provide electric service to someone’s home, after SVEC purchases power from ODEC.

The “Variable Distribution Charge” is the only portion of the bill that will change with SVEC’s rate filing.

Under the new rates, an average residential member using 1,000 kWh per month will see an increase of about $7.27 per month, which includes the Power Cost Adjustment rate as of February 2024.

• The Power Cost Adjustment (PCA) is a pass-through cost from our wholesale provider, Old Dominion Electric Cooperative (ODEC). SVEC has no control over it, and it makes up about 70% of the monthly bill.

Impact on individual member bills may vary based on rate schedule and usage.