Dominion Virginia Power, a subsidiary of Dominion Resources Inc. (D), is seeking the approval of the Virginia State Corporation Commission for an electric pricing program meant to encourage customers to charge plug-in electric vehicles during off-peak hours.
The proposed pilot program is designed to offer different pricing options, depending on the time of day. The voluntary program will offer reduced rates for overnight charging and higher rates during peak times to Virginia customers.
Customers in the pilot would pay as little as 33 cents to charge an electric vehicle overnight with enough electricity for a typical commute of 40 miles. This compares with a cost of up to 86 cents using the standard residential electric rate.
As part of the pilot program the electric vehicle owners are being offered two experimental rate options – Electric Vehicle only and Whole House options. The Electric Vehicle only option provides for charging of the electric vehicle only and would cost about 35 cents for overnight charging, enough for a typical 40-mile commute of the vehicle.
The Whole House option allows the customers to take advantage of lower prices for many household activities like using dish washers and clothes dryer during off-peak hours. The estimated cost for these customers would be between 33 and 41 cents to charge an electric vehicle overnight with enough electricity for the daily commute.
Dominion believes the electric vehicle market has the potential to grow to 5% of all vehicle sales in Virginia, for a total of 86,000 electric vehicles, by 2020. If charged on peak, these vehicles could lead to an increase in the amount of peak-demand electricity supplied in 2020 by about 250 megawatts.
The company intends to partner with car dealers and charger installation vendors to build customer awareness. Each rate option would be limited to 750 participants for a total of 1,500, who would have to stay enrolled for one year. The pilot would be available to customers within 90 days from regulatory approval, and would terminate November 30, 2014.
Based in Richmond, Virginia, Dominion Resources, together with its subsidiaries, engages in producing and transporting energy in the United States. Through its primary subsidiary, Dominion Virginia Power, the company distributes power to nearly 2.2 million customers in Virginia and northeastern North Carolina. The company mainly competes with Nisource Inc. (NI) and Allegheny Energy Inc. (AYE).
Dominion Resources currently retains a Zacks #3 Rank (short-term Hold rating). We maintain our long-term Neutral rating on the stock.
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