Dominion Virginia Power asked state regulators yesterday to approve a fuel-rate increase that could raise a typical monthly residential bill 18.3 percent.

The rate increase will cover $1.1 billion more in anticipated fuel costs at Dominion Virginia Power plants for the 12 months beginning July 1.

Residential customers using 1,000 kilowatt hours of electricity per month would see bills increase by $16.61, if the State Corporation Commission approves the full rate request. Their bills would rise from $90.59 to $107.20.

The commission typically tries to act on rate requests before their proposed effective date, SCC spokesman Ken Schrad said.

"What Dominion is dealing with is what all utilities are dealing with: rising commodity costs," said Steve Marascia, a utilities analyst with Anderson & Strudwick in Richmond. "This is going to be the reality for all consumers."

The costs of the coal, natural gas, fuel oil and uranium that Dominion Virginia Power needs to run its power plants all have risen -- in some cases by more than 200 percent -- since 2004, said Mark McGettrick, president and CEO of Dominion Generation, which operates the utilities' power plants.

Fuel costs usually are passed on to the company's 2.2 million customers dollar-for-dollar without a profit for utilities. The company's base rates, on which the utility makes its profit, have not changed since 1999.

When Dominion Virginia Power went to the commission last year for a rate increase, a new state law re-regulating the electricity industry limited the rise to 4 percent ($3.41 for a typical residence). The company was required to carry over roughly $443 million of anticipated fuel costs for future collection.

In the past year, however, McGettrick said the cost of coal has risen 95 percent, oil 55 percent, natural gas 20 percent, purchased power 28 percent, and uranium 14 percent. The effect is that uncollected fuel costs are expected to increase to nearly $700 million through June 30.

"We are in a skyrocketing commodity-price environment," McGettrick said.

To ease the impact of higher fuel costs, the utility is proposing to defer last year's costlier uncollected fuel costs. It proposes to collect the $700 million over three years, beginning July 1, 2009, McGettrick said.

If the $1.1 billion Dominion Virginia Power is requesting now is approved by the State Corporation Commission, the company's fuel charge would increase from 2.23 cents per kilowatt hour to 3.893 cents per kilowatt hour this July. The utility would collect a total of $2.6 billion for power-plant fuel during the 12-month period.

Without deferring the uncollected costs, the requested fuel charge would be 4.245 cents per kilowatt hour, or 22.2 percent for a typical residence, the company said.

Approval of the rate request is not certain. In February, the commission approved an increase of less than what Appalachian Power, which serves the western part of the state, had requested.

Last week, Allegheny Power, which serves 101,000 customers in Northern Virginia, asked the commission for an annual fuel-rate increase of a minimum of $73 million, which would raise the average customer's bill 29 percent.

Allegheny, which sold its power plants during deregulation and now buys all its power on the market, warned that it is bleeding millions of dollars, putting the financial health of the utility, which also serves West Virginia and Maryland, in jeopardy.

McGettrick said that with the proposed increase, Dominion Virginia Power's typical residential bill would remain below the national average of $113.56 per month.

David Heacock, president of Dominion Virginia Power, said the utility is taking steps to help customers cope with increased rates, including a $5 million increase in its contribution to Energy Share, a program that helps low-income customers pay their heating and cooling bills; changes to make enrollment in the company's budget billing plan easier; and the opening of budget billing to small business, nonprofit groups, and houses-of-worship customers.

The company also will speed up the beginning of test programs for the conservation and efficient use of electricity, Heacock said. He advised consumers to check the company's Web site, www.dom.com, for conservation information.

McGettrick said the company operates its power plants as efficiently as possible to hold down fuel costs and is taking other steps, such as importing South American coal to a Chesapeake power plant, when that coal is cheaper than U.S. coal.

Contact Greg Edwards at (804) 649-6390 or gedwards@timesdispatch.com.