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July 1, 2026, to June 30, 2028, VEPGA Contract Overview
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prices increased more than expected during 2025 and spiked considerably in
January 2026 due to the abnormally cold weather. Furthermore, the Iranian War has
increased energy prices across the board, including natural gas.
• Because of these market forces Dominion significantly under recovered its fuel
costs for both jurisdictional and non-jurisdictional customers and requires the need
for the increase.
• Dominion provides monthly fuel report updates to VEPGA and will continue to report
on such trends and balances to the VEPGA board.
PJM Capacity Cost:
• PJM, the regional grid operator for Virginia, is experiencing a significant shortfall in
generation capacity throughout the entire region, but especially within Dominion’s
transmission zone. This is largely because of rapid growth in demand (primarily but
not exclusively driven by data centers) that has outstripped available generation
supply. This dynamic has led to significantly higher prices for capacity throughout
PJM.
SCC Jurisdictional Customer Impacts:
• Dominion has proposed to finance approximately $1.2 billion in deferred fuel costs
for jurisdictional customers, whereby such costs would be recovered over the next
7-10 years with interest. Jurisdictional customers (but not VEPGA members) are
already paying for previously incurred deferred fuel costs from 2022 that were
“securitized” with interest.
• VEPGA members have not, and will not, be subject to the jurisdictional
securitization (which includes interest) because VEPGA members have “paid as we
go” and because the VEPGA Negotiating Team secured an interest-free deferral of
certain fuel costs until the upcoming rate year.
• Fuel costs, including purchased electricity from PJM, will be borne by both non-
jurisdictional customers (like VEPGA members) and jurisdictional customers.
Future Costs Outlook
July 1, 2027, Contract Incremental Increase
• Effective July 1, 2027, VEPGA will begin paying for an additional $12 million in
deferred capacity costs
• Dominion has agreed to defer at least $56 million in fuel costs to rate year 2027
(with no interest or “carrying costs”), although this number may increase based on Jump to an indexed page (10 of 10)