Power Companies Ask Public Service Commission for $297 Million Annual Rate Adjustment

Appalachian Power and Wheeling Power are requesting an adjusted rate increase of $297 million per year.

Currently, the monthly bill for a residential customer using 1,000 kilowatt hours is $155.66, according to Appalachian Power. If approved as filed, the adjustment would add $18.41 to this amount effective September 1, 2022.

Appalachian Power has 1 million customers in Virginia, West Virginia and Tennessee (as AEP Appalachian Power). It is part of American Electric Power.

The companies made their request through a Tuesday night filing with the West Virginia Public Service Commission. This is the kind of deposit companies typically make at this time of year to adjust the amount of fuel and electricity rates purchased. The proposed adjustment follows increases approved of about $100 million late last year and early in the spring.

Companies say they have fallen behind millions of dollars in cost recovery while facing the likelihood of additional costs. The amount and the reasons related to the news emerge from the proposed rate adjustment.

Due to volatility in energy markets, companies are also suggesting more frequent reviews of their expanded net energy cost statements.

Chris Beam

“With the sharp and rapid increase in energy and fuel costs over the past few months, the ENEC revenue we collect from customers has been and is expected to be significantly lower than the cost of energy delivered to customers,” said said Chris Beam, Appalachian. President and Chief Operating Officer of Power. “The longer it goes on, the bigger the deficit, and that’s what necessitates this demand.”

He added: “Making that deposit is difficult, especially when inflationary pressures are weighing on families on so many fronts. However, if the unrecovered ENEC amount continues to increase, it will become even more difficult to manage in the future.

One of the reasons for the 141-page dossier is to recoup the ongoing costs of fighting the covid-19 pandemic. Another is the rising cost of energy, particularly coal, driven by global demand.

Testimony in the filing by Clinton Stutler, the company’s head of natural gas and fuel oil, describes falling natural gas prices as demand fell during the pandemic, a rebound and then greater volatility driven by weather events and the Russian invasion of Ukraine.

Jeffrey Dial, Director of Coal Supply, Transportation and Reagents, testified in writing that coal prices rose rapidly in the second half of 2021 as demand grew domestically and globally.

“The increase in demand for coal was mainly due to the increase in natural gas prices, making coal the least expensive option for generating electricity,” Dial said. “Coal supply is expected to be constrained throughout 2022.”

The West Virginia Energy Users Group, which represents some of the state’s largest manufacturers, said it was still reviewing the details of the case but found it troubling.

Derrick Williamson

“WVEUG is analyzing the AEP case, but on its face, APCo and Wheeling’s request for a nearly $300 million rate increase is patently unreasonable. Such an increase would be devastating to West Virginia manufacturing and industry, and to all captive AEP monopoly taxpayers in West Virginia,” said Derrick Williamson, Executive Director of the Energy Users Group.

The energy users group suggested the increase could lead to total tariff increases of almost 40% for some large users, putting companies out of reach of other suppliers.

“WVEUG will certainly intervene in the matter to protect the interests of manufacturing and industry and will carefully assess the reasonableness and prudence of AEP’s flawed decision-making, planning and forecasting that led to to this economically disastrous rate increase proposal,” Williamson said.

Kent Carper

Kanawha County leaders also publicly opposed the proposed rate increase.

“This follows a rate increase application filed in March 2022. Our citizens cannot afford any further rate increases by utility companies,” said Kanawha County Commission Chairman Kent Carper. .

“I initially call for a moratorium on these back-to-back rate hikes. I also call on the West Virginia Legislature to exercise oversight over public services and end this ridiculous and ongoing attack on the people of West Virginia.

Eleanor C. William