Dominion Virginia Power says it still needs to raise rates, despite a state report that says the company earned $523 million more than necessary last year.

The state's largest power company responded Wednesday to a State Corporation Commission staff filing, which also recommended a rate cut.

Officials reviewed Dominion's earnings as part of its request for the first base rate increase in 17 years. Those rates cover Dominion's operating costs and comprise about two-thirds of customers' bills.

Dominion says an unfairly low rate of return was used when recommending the rate cut.

The SCC recommended a rate of return of 10.2 percent. Last year, Dominion earned a 19 percent return. Dominions says the rate should fall between 11.8 percent and 13.6 percent.

©2009 The Associated Press. All rights reserved.