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SCC Approves Appalachian Power Surcharge Increase

From staff reports

Round two of the battle for higher electricity costs goes to Appalachian Power, who won SCC approval last week to raise some of its rates.

The State Corporation Commission (SCC) is allowing Appalachian Power Company to adjust its capped electric rates to recover $48.9 million of environmental and reliability costs. The amount is approximately $10.6 million less than the company's original request.

The money will be recovered through a surcharge appearing on monthly bills beginning Jan. 1, 2008 and ending Dec. 31, 2008. The projected impact on the monthly bill is approximately three percent. The surcharge replaces one that appeared on bills until Nov. 30, 2007.

On May 15, 2007, the Virginia State Corporation Commission (SCC) issued a final order in Appalachian Power's general rate case filed in May 2006. The SCC ordered that the base rate increase will total 3.1 percent instead of the requested 25 percent.

The company had sought an increase of approximately $198 million in its application filed in May 2006.

The SCC's action followed huge public outcry and interference by some local legislators.
According to the SCC, Virginia's Electric Utility Restructuring Act permits a company such as Appalachian Power to recover costs for compliance with state and federal environmental laws and regulations and for transmission and distribution system reliability. The recovery of actual costs being allowed by the Commission covers a period from Oct. 1, 2005 through Sept. 30, 2006.

The surcharge will be calculated by the company and filed with the SCC's Division of Energy Regulation prior to Jan. 1. Any future surcharges sought by the company will include a true up mechanism to ensure there is not an over- or under-recovery as a result of the surcharge approved in this case.

Appalachian Power has two other rate cases pending before the commission. One is a fuel rate adjustment that is already in effect on an interim basis. The other involves the company's request to recover, through another surcharge, the financing and start up costs for the planned construction of a 629-megawatt clean-coal power plant in Mason County, West Virginia.

Appalachian Power provides electric service to approximately 500,000 customers in all or portions of 31 counties in Southwest Virginia.

 

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