Appalachian Power rate review to SCC

APCoRICHMOND, Va., – A plan to improve service reliability and reduce the impact on low-income customers are among the prospective changes included in Appalachian Power’s triennial rate review application submitted today to the Virginia State Corporation Commission (SCC). The review provides an opportunity for the SCC to examine the company’s financial and operational performance, and any request to modify the base rate for service or return on equity.

The SCC last conducted a triennial review of Appalachian Power’s rates and earnings in 2020. In the application filed today the company requested to increase rates by approximately $212 million, or 16 percent, to continue to provide customers with safe and reliable electric service.

Numerous factors contributed to the request to modify rates, including increases in capital, depreciation, and material and labor costs related to the company’s distribution operations and vegetation management. Additional funds will allow Appalachian Power to restore maintenance of miles of its rights-of-way to pre-2020 levels and target the worst-performing circuits.

“Trees and other vegetation are consistently the leading cause of outages,” said Aaron Walker, Appalachian Power president and chief operating office. “We have an obligation to ensure our customers have access to safe and reliable service. Substantial tree removal, pruning, and brush clearing are needed to prevent and reduce the duration of outages across the system.”

“We understand this request comes at a time when other costs are increasing for customers,” said Walker. “We have included a proposal to reduce the financial impact on our lower income customers and will work with the SCC and others to help balance competing interests to the greatest extent possible.”

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 will see a net increase in their monthly bill of approximately $20. A customer using 2,000 kWh would see their bill increase approximately $40. Any increase approved by the SCC will not take effect until January 2024.

To reduce the impact on lower income customers, the company has requested approval to eliminate the basic service charge for qualifying low-income customers. Appalachian Power serves about 540,000 customers in southwest, central and southside Virginia. Under the proposal about seven percent of its residential customers would qualify for the discount, which would amount to savings just under $100 a year.

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 approximately 17,000 employees operate and maintain the nation’s largest electricity transmission system and more than 224,000 miles of distribution lines to efficiently deliver safe, reliable power to nearly 5.6 million regulated customers in 11 states. AEP is also one of the nation’s largest electricity producers with approximately 31,000 megawatts of diverse generating capacity, including more than 6,900 megawatts of renewable energy.