Appalachian Power Proposes 5% Rate Increase To Be Effective In 2021

As required by Virginia law, Appalachian Power has presented the State Corporation Commission (SCC) with its first triennial rate case. If approved, the request would raise rates for its Virginia customers an average of 5 percent.

“We’re aware that we are filing this application at an unprecedented time in our history,” said Chris Beam, Appalachian Power president and COO, in reference to the COVID-19 pandemic.  “We are required by law to make this filing now. We must follow that law, while balancing our customers’ expectations of safe and reliable service. We will work with the SCC and all interested parties as this application is considered during these uncertain times.”

Under the 2018 Grid Transformation and Security Act, Appalachian Power must submit a rate case filing on March 31, and the SCC is required to rule on the application by Nov. 30.  If the Commission decides to grant a rate increase, it would not take effect until 2021.

The rates Appalachian Power customers currently pay for electricity were set in 2011 and are based on 2010 costs. Since then, the company has continued to maintain and improve its distribution and generation infrastructure, integrated renewables into the electric grid, complied with environmental regulations, and deployed new technology to improve reliability and communication with customers.

To address the concern customers have around bills during the winter months, the company is proposing to implement a rate discount effective December through February each year. With the new seasonal rate structure, customers with higher winter usage, such as those with electric heat, may see little or no increase, or even a decrease in their annual bills. Roughly 66 percent of Appalachian Power’s low-income customers heat with electricity.

“We have made efforts in this case to not only minimize impacts to our low-income customers, but also to help industrial customers and major employers,” said Beam. The filing includes a rate proposal to support economic development efforts that encourage the expansion of existing, and the recruitment of new, industry and business.

The proposed increase will vary depending on customer class and usage. If approved as requested, residential customers using 1,000 kilowatt hours (kWh) a month – whose current monthly bills are virtually the same as they were in 2010 – will see an approximate $10 increase in their monthly bill. Even with the rate change, Appalachian Power’s Virginia rates would remain well below the national average.

Appalachian Power has 1 million customers in Virginia, West Virginia and Tennessee (as AEP Appalachian Power). It is part of American Electric Power, which is focused on building a smarter energy infrastructure and delivering new technologies and custom energy solutions.

AEP’s more than 18,000 employees operate and maintain the nation’s largest electricity transmission system and more than 219,000 miles of distribution lines to efficiently deliver safe, reliable power to nearly 5.4 million customers in 11 states.

AEP is also one of the nation’s largest electricity producers with approximately 32,000 megawatts of diverse generating capacity, including 5,300 megawatts of renewable energy.

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