Chesapeake Dominion Energy customers could see a new charge of as much as $13 on their monthly electric bills under a proposal the utility has submitted to state regulators. A separate state-funded credit could offset most or all of that increase for residential customers.

Dominion asked the Virginia State Corporation Commission to approve the reinstatement of its Regional Greenhouse Gas Initiative rate adjustment clause, known as Rider RGGI.

The utility wants to recover the cost of carbon emission allowances it must purchase under the Regional Greenhouse Gas Initiative, a multistate program that caps power-plant carbon dioxide emissions.

Virginia resumed participation July 1, 2026, after Gov. Abigail Spanberger signed legislation reversing former Gov. Glenn Youngkin's withdrawal from the program.

At an Oct. 28 SCC hearing, Dominion outlined two options for billing customers, according to the Virginia Mercury.

The first would recover accumulated costs without spreading them over an extended period, adding about $13 per month for a typical residential customer using 1,000 kilowatt-hours of electricity.

The second would spread eight months of unrecovered costs over two years, reducing the estimated monthly increase to about $10.

Those figures represent the proposed charge before accounting for a separate customer credit.

The RGGI rider is not expected to appear on bills until March 2027. The SCC must first approve the amount and rate structure.

Why costs are higher

Dominion estimates it must spend approximately $1.18 billion on carbon allowance costs included in its proposed recovery plan.

Allowance prices have risen substantially since Virginia last participated in the program.

Dominion projects prices ranging from $37.04 to $38.32 per allowance through 2028.

The September 2026 auction cleared at $37.65 per allowance, more than double the $14.88 price at Virginia's last auction before its 2023 withdrawal.

RGGI requires regulated power plants to obtain an allowance for each ton of carbon dioxide they emit. Participating states sell allowances through regional auctions.

The proceeds are used for state programs, including energy efficiency and flood preparedness.

A credit could offset the charge

Virginia's 2026 budget directs 45% of the state's RGGI auction revenue toward electric bill credits for residential, small-business and church customers.

Energy officials estimate the credits could nearly offset the new monthly charge for qualifying customers.

That would mean the gross increase shown in Dominion's proposal may differ substantially from the actual change households see on their bills.

The details remain under review.

The SCC must determine how the credits will be calculated and distributed, including whether they should be applied monthly or quarterly.

In separate coverage of the Oct. 28 hearing, Virginia Free Press reported that Dominion initially favored quarterly credits, while other participants supported monthly credits to keep customer bills more predictable.

The budget provision directs the remaining 55% of auction revenue toward existing programs, including low-income energy efficiency and flood preparedness.

That represents a change from Virginia's earlier participation, when a larger share of auction proceeds went toward those programs.

Environmental groups challenge the proposal

Appalachian Voices and the Sierra Club, which are participating in the regulatory case, have raised concerns about Dominion's continued reliance on fossil fuel generation.

The groups also questioned the cost of spreading overdue payments over two years.

According to the Virginia Mercury, intervenors estimated that the extended payment approach could add up to $17 million in financing costs.

Dominion has defended its generation plans, which include natural gas and renewable energy, as necessary for maintaining electric reliability.

The commission will consider the utility's proposal and the arguments from other participants before determining the final rate.

What happens next

The SCC has until Feb. 5, 2027, to decide how the RGGI rider and customer credits will be implemented.

The next RGGI carbon allowance auction is scheduled for Dec. 2, 2026, according to the Virginia Department of Environmental Quality.

If approved, the rider is expected to begin appearing on Dominion customer bills in March 2027.

Residents can review the regulatory proceeding and submit comments through the SCC's Case PUR-2026-00085 page.

The final impact on Chesapeake households will depend on the approved charge, electricity usage and the amount of the corresponding RGGI credit.