Gov. Abigail Spanberger wants Dominion Energy and NextEra Energy to freeze residential base rates for six years as a condition of their proposed $67 billion merger. However, that proposal would not prevent customers’ total electricity bill from still rising — base rates did not increase from 1992 to 2025, but monthly bills rose 65% between 2007 and 2025.
Spanberger outlined the demand in testimony filed with the Virginia State Corporation Commission on Monday, arguing that the companies have not demonstrated that the merger would adequately protect Virginia consumers. She is also seeking to increase monthly customer credits and impose additional requirements on the companies before regulators approve the deal.
The proposed freeze would prevent increases to base residential rates over three rate-case cycles. But base rates represent only part of a customer’s electric bill, so other charges could still rise even if the freeze is adopted.
That distinction is significant given how much Dominion customers’ bills have increased over the past two decades.
According to a 2025 SCC report, the typical Dominion residential customer using 1,000 kilowatt-hours of electricity per month paid $90.59 in July 2007. By July 2025, that bill had reached $149.92 — an increase of $59.33.
Before 2025, Dominion’s base rates had not increased since 1992. Instead, customers’ bills have been affected by other expenses, including fuel costs and separate rate-adjustment clauses that allow the utility to recover certain costs.
What would the freeze accomplish?
Base rates cover costs associated with generating and delivering electricity, including distribution and transmission infrastructure.
Other portions of customers’ bills, such as fuel charges and certain infrastructure-related costs recovered through separate adjustments, are handled differently.
Actual customer savings would depend on which rate increases otherwise would have been approved and which charges remain outside the freeze.
Rate adjustment clauses, commonly referred to as RACS, allow Dominion to increase costs for big projects. The offshore wind project, for example, adds roughly $4 to Dominion customers’ monthly bills.
Spanberger is seeking additional protections alongside the freeze. Her proposal would increase the monthly customer credit to $29 for four years, up from the $10 credit offered in the companies’ revised merger proposal.
Spanberger also wants to increase the share of Dominion’s capital structure financed through debt from 48% to 60%, reducing the equity share from 52% to 40%. The change is intended to lower the utility’s overall cost of capital and reduce costs passed on to ratepayers. However, a higher debt share could also affect the company’s financial risk and borrowing costs. It could impact Dominion’s credit ratings, increase borrowing costs and cause reduced financial flexibility – potentially exposing customers to those risks.
A broader fight over the merger
The rate-freeze proposal comes as the merger faces mounting opposition in Virginia. However, the sweeteners, incentives and overall opinions from Virginia’s leaders have no impact on the actual review of the merger.
The SCC cannot approve the merger unless it finds that it will not “impair or jeopardize” adequate service at just and reasonable rates. That is all that matters.
SCC staff recommended that regulators reject the transaction as currently structured, citing concerns about financial risks and whether the companies’ commitments adequately protect customers.
In a joint statement from Dominion and NextEra, the companies said the merger represents a generational investment in Virginia, bringing $2.1 billion in benefits through bill credits, payment assistance, workforce development and charitable investments. The joint statement also said the merger will create 1,000 new direct jobs and maintain Dominion’s current Virginia workforce for five years.
“The combination will also strengthen our ability to invest in reliability and critical infrastructure while helping keep energy affordable for Virginia families and businesses,” the joint statement continued. “Dominion Energy Virginia will remain locally led, separately regulated and fully accountable to the State Corporation Commission.”
“We are reviewing the filings and will address the issues raised through the Commission’s established process,” they concluded.
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