Virginia stakeholder group hears primer on how utility rates are set and which costs are recovered through riders

The Performance Based Regulation Stakeholder Group heard an overview of how the State Corporation Commission sets electric utility rates in Virginia and how a growing share of costs is recovered through rate adjustment clauses during a virtual meeting on Dec. 12, 2024.

The presentation from Kim Pate, director of utility accounting and finance at the State Corporation Commission, described three primary rate proceedings: the fuel-factor and other rate adjustment clauses (dollar‑for‑dollar trackers), periodic adjustments to base rates that recover the utility’s remaining costs, and biennial earnings reviews. "The commission is an economic regulator. So that means we're setting the rates," Pate said while outlining the statutory framework in Article IX of the Virginia Constitution and Title 56 of the Virginia Code that governs public service companies.

The nut graf: The group convened to inform a study of performance‑based regulation. Understanding how costs are allocated today—especially the growth of riders that are trued up annually—frames stakeholder discussion about whether multiyear…