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electric utilities established by the Federal Energy Regulatory Commission is 11.74 percent. Meanwhile, the Business Week composite of the top 1,000 companies in America — companies that face competition and greater risk than Virginia’s monopoly utilities — earned 10.9 percent return on equity in 1986.
Rate of return decisions by the SCC have lagged behind those in other jurisdictions. This is part of the reason our rates have not dropped. The rate of return level has a big impact on rates. One percentage point change in the rate of return for Virginia Power is worth more than $30 million, for Apco $6 million, and for Potomac Edison, $850,000.
The first crack in the dam came last spring, when the SCC ordered five msgor electric companies to file expanded Annual Information Review documents. The SCC was under pressure from a growing number of petitioners requesting a review of authorized rate of return levels. As a result, Delmarva Power has cut rates $805,000 with a rate of return of 13 percent. Potomac Edison has agreed to a 13.25 percent rate of re
90.7%