WV PSC approves AEP rate increase - WOWK 13 Charleston, Huntington WV News, Weather, Sports

WV PSC approves AEP rate increase

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    Monday, August 8 2016 10:15 AM EDT2016-08-08 14:15:05 GMT

    As Appalachian coal production continues its drastic decline, West Virginia’s coal-producing counties are  not only losing people as lifelong residents are forced to flee their homes in order to find work, but in many cases, they’re also relinquishing millions of dollars from their budgets.

    As Appalachian coal production continues its drastic decline, West Virginia’s coal-producing counties are  not only losing people as lifelong residents are forced to flee their homes in order to find work, but in many cases, they’re also relinquishing millions of dollars from their budgets.

The West Virginia Public Service Commission has granted Appalachian Power Co. and Wheeling Power a rate increase of $123.457 million, or 9 percent, effective May 26.

The PSC also has ordered a one-year phase-in of the rate increase for residential customers, which will come to $14.30, or 11.8 percent, per month for the average residential customer. Without the phase-in, according to the PSC, the average residential customer would have seen an increase of about $19.50, or 16.1 percent, per month. Even with the increase, Appalachian Power stated, rates for Appalachian's customers are below the national average of 12.24 cents per kilowatt-hour.

“We want the same thing our customers want, and that's safe, reliable electric service that is affordable,” Charles Patton, Appalachian Power president and COO, said in a statement. “The Commission has the tremendous responsibility of trying to balance the economic realities of the state with the financial health of the companies it regulates. 

"This decision moves us in the right direction; however, we are in an increasing-cost business," he added. "Ultimately, the financial health of the company affects the future reliability of service, the scope of services and even the future cost of electricity, because an unhealthy company pays significantly more to attract investors.”

The order includes $13.7 million in cost recovery for the Derecho and Superstorm Sandy, which caused a significant amount of damage in 2012, Appalachian Power stated. Those costs will be spread over five years. The increase also includes $44.5 million in cost recovery for the company's new cycle-trimming vegetation management program.

The companies, which are subsidiaries of American Electric Power, had originally requested a $226.040 million, or 16.48 percent, increase.

The total increase in customer rates consists of two parts: an increase in base rates and an increase for recovery of the costs for a Vegetation Management Program (VMP) through a VMP Surcharge.

The increase in base rates is driven by increased investment of $407 million in the companies' utility plants required to meet increased environmental regulations and service requirements, and increased operation and maintenance expenses, the PSC stated. The companies' base rates include all costs of the Companies except for the fuel and fuel-related costs that are included in the Expanded Net Energy Cost (ENEC) rate that is adjusted annually and the VMP costs to be recovered in the VMP Surcharge.

In response to the announcement, Emmett Pepper, executive director of Energy Efficient West Virginia, said the vacant position on the PSC needs to be filled.

"The governor needs to fill the empty seat on the PSC by appointing someone who has a history of public service, working for common West Virginians," he said.

Pepper also said ratepayers can work to lower their bills by making their homes more energy efficient.

AEP serves more than 476,000 customers in 24 West Virginia counties.

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