Virginia Electric and Power Company, operating as Dominion Energy Virginia, has filed a petition with the State Corporation Commission (SCC) seeking approval to issue deferred fuel cost bonds to finance its substantial deferred fuel cost balances. The petition, submitted on May 29, 2026, requests authorization under § 56-249.6:2 of the Code of Virginia to securitize approximately $1.024 billion in deferred fuel costs and related upfront financing expenses.

Dominion’s deferred fuel costs stem from a significant under-recovery of fuel expenses driven by increased commodity prices during the prior fuel period. As of June 30, 2026, Dominion projects a total fuel deferral balance of around $1.078 billion, which includes approximately $1.012 billion in under-recovered costs from the July 2025 to June 2026 period and about $65.8 million from the prior period ending June 2025. Historically, Dominion has recovered these costs through an annual fuel factor adjustment applied to customer bills on a dollar-for-dollar basis.

The utility argues that securitizing this balance through the issuance of bonds, known as Deferred Fuel Cost Bonds, would enable it to reduce the near-term financial impact on customers compared to a full recovery via the traditional fuel factor. The securitization statute, enacted by the Virginia General Assembly in 2023 and updated in 2026, allows electric utilities to create a special purpose entity to issue bonds secured by deferred fuel cost property. Customers would then pay a separate, non-bypassable Deferred Fuel Cost Charge based on their electricity consumption to cover bond repayments.

Dominion proposes issuing the bonds in one or more series with a total principal amount not exceeding the securitizable balance. The Company is seeking approval for the financing costs, including both upfront and ongoing expenses, and plans to file a supplemental update in early August reflecting final deferral balances. Bond amortization options under consideration range from approximately seven to 15 years. Estimated initial monthly charges under these scenarios for a typical residential customer using 1,000 kilowatt-hours per month would vary from $3.05 for the shortest term to $1.81 for the longest.

The Company favors a roughly ten-year maturity period, citing it as a balance that offers customers meaningful initial and ongoing rate savings compared to traditional recovery while avoiding extended amortization that could raise intergenerational equity concerns. Dominion aims to initiate the bond issuance and begin billing the Deferred Fuel Cost Charge in early 2027, subject to SCC approval.

To provide context, Dominion has proposed recovering the current period fuel factor and only the smaller portion of the prior period deferral through the fuel factor on an interim basis, resulting in a $7.97 monthly increase for a typical residential customer. Without securitization, full recovery of the deferred fuel costs through the fuel factor would represent a much higher monthly increase of $21.79 per 1,000 kWh.

The SCC has combined the procedural schedules of this financing petition with Dominion’s 2026-2027 fuel factor proceeding to coordinate hearings and filings. A public hearing allowing consumer testimony on the petition is scheduled for August 11, 2026, to be conducted telephonically and webcast. The evidentiary hearing will follow the public testimony session at the SCC’s Richmond headquarters.

Stakeholders interested in submitting comments or petitions to participate as respondents must act by early July, with detailed filing instructions and case documents available on the Commission’s website. The SCC has established electronic filing and service protocols to facilitate the review process in these proceedings.