Virginia Natural Gas (VNG) residential users could see their utility bills increase by an average of over $8 monthly, if state regulators accept the company’s current proposal to make an interim rake hike permanent.
The interim rate was put into place in January 2025 to help the company keep operations going amid demand increases and other investments. Now the company is proposing the rate be made permanent to help them keep the lights on as business grows.
The gas utility’s original proposal asked the State Corporation Commission to allow them additional revenue of over $60 million that would have added an average of $11 to residential gas users’ bills. A stipulation was proposed earlier this month to lower that to $40 million, bringing the average bill increase to $8, which the SCC will have to approve.
Since the interim rate has been put into place, however, consumer advocates said they have learned of major increases for some households.
“One resident in Williamsburg said their bill went from $29 to $202 one month after the rate change went into effect,” said Elizabeth Putfark, an associate attorney with the Southern Environmental Law Center. “That average is just such a poor metric to show what people are experiencing, both because of the monthly difference in temperature, but also because somebody that has a 1400 square foot home or condo that’s using gas for all of their major appliances (will be affected differently than) someone who’s got a different style home and just gas logs or just has a grill.”
VNG has been working to make upgrades to their pipelines through the Steps to Advance Virginia’s Energy initiative to the tune of $16 million and other efforts to meet growing energy demands.
“VNG’s requested rate increase is driven by the substantial investments needed to improve the operations, safety, reliability and resiliency of its system to meet growing energy demand. These investments are essential to maintaining a modern and secure natural gas infrastructure for customers,” said Morgan Chase, a spokesman for VNG.
The SELC is representing Appalachian Voices, Virginia Majority, and Virginia Organizing in the case. They believe VNG has not fairly calculated how this rate change will impact low-income households, which stand to take the brunt of the impact, and should have implemented payment plans or invested in weatherization funds to help manage the costs for those homes.
“Utilities have bills. They have to occasionally, sometimes raise rates to keep reliable service going. We’re arguing that they should not be raising bills without having taken a hard look at the impacts on their customers and trying to mitigate those impacts where they would be disproportionate,” Putfark said. “Both because of the just and reasonable ratemaking obligation, which is about striking a balance between customers and shareholders.”
The company, which covers gas service for many of Virginia’s coastal counties, has been advertising its use of new generation gas, which they claim is cleaner. This is drawing in new customers, the utility said, and driving the need for more revenue to make sure service is sustained.
The SCC will receive legal briefs from the parties and then consider their approval or denial of the rate increase later in the year.
The company’s infrastructure is expanding in other ways that might levy a cost on ratepayers. Recently, VNG proposed a new compressor site in Chesapeake that would provide more gas from pipelines to corporate and residential users farther from the source. The project was championed by a paper manufacturer who wanted to pay to have reliable service at all times.
