By Michael Brooks

The Federal Energy Regulatory Commission last week rejected Dominion Virginia Power’s request to push back the effective date for a rate revision by more than year, a change that would have cost transmission customers $11.1 million (ER15-856).

Dominion had asked FERC to change the effective date of revised transmission depreciation rates from April 1, 2013, to Jan. 1, 2012. FERC approved the revised rates last April.

FERC said changing the date would violate its rule against retroactive ratemaking, a charge the North Carolina Electric Membership Corp. made in a February protest to the request. (See NCEMC: Dominion Request is ‘Retroactive Ratemaking’.)

“The filed rate and retroactive ratemaking doctrines both bar a public utility from charging a rate other than the rate properly filed with the commission, and similarly bar the retroactive imposition of an increased rate for service already provided,” FERC said. “However, this is precisely what Dominion proposes to do in the instant filing … by now proposing to charge customers an additional $11.1 million from Jan. 1, 2012, through March 31, 2013.”

Dominion said it requested the extension because of a Virginia State Corporation Commission ruling that increased its depreciation expense and accumulated depreciation effective Jan. 1, 2012 — the date of a depreciation study commissioned by Dominion. The SCC told FERC it supported Dominion’s request, saying it is standard practice to use the date of the study as the effective date for changes in depreciation rates.

FERC responded that “we are not suggesting that a Jan. 1, 2012, effective date would be inappropriate for retail rates, which is within the purview of the states. In this case, however, Dominion will receive all of its transmission operations and maintenance expenses through its formula rate, and its allowed rate of return and associated income taxes on all unrecovered plant balances. Furthermore, the commission has previously accepted rates that reflect regulatory differences from what this commission requires for accounting purposes and what state commissions require for state rate purposes.”