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Appalachian Power seeks rate increase to collect money deferred during pandemic year

CHARLESTON, W.Va. — Appalachian Power Company says it’s time to collect improvement costs it agreed to defer last year because of the pandemic.

The company was before the state Public Service Commission Friday arguing in favor of two rate increase requests including its Expanded Net Energy Cost (ENEC) rate and its Vegetation Management surcharge.

John Scalzo

Approval of both requests by the PSC would increase the monthly bills of average customers by 4.14% percent or $5.95 a month.

Appalachian Power Vice President John Scalzo testified the company agreed to defer $55 million in the ENEC rate that it should have collected last year. He said now appears to be the right time to seek reimbursement of the money the company has already spent in transmission costs and for construction projects dating back to the end of 2017.

“We’re emerging from a pandemic. It seems like the economy is fairly strong across the nation,” Scalzo said.

Appalachian Power’s fully requested increase of ENEC this year, including the deferral, is approximately $74 million.

West Virginia Energy Users Group (WVEUG) wants about half of the requested amount, $36 million, deferred for another year. WVEUG witness Steve Baron, president of J. Kennedy and Associates, told the PSC Friday the deferral makes sense when considering other rate hike requests Appalachian Power has made.

Steve Baron

“The support for my recommendation is not just the amount of the (proposed) increase but all of the increases the company is requesting, some of which that have already been approved,” Baron said.

He said current requests from Appalachian Power would increase customer rates by $174 million.

Baron predicts the company won’t be asking for so many different rate increases next year so putting off $36 million until then wouldn’t hurt.

“It’s a very large increase ($174 million) and so it’s just not realistic to expect the company would come up with a set for surcharges or other increases that would be consistent with this level. That’s my prediction,” Baron said.

Scalzo argued the company’s costs will continue to grow and it’s going to become more difficult for its customers.

“Somewhere along the line we’re going to have to catch back up,” Scalzo said. “If you do a catch-up and you get there we’ll be in a better spot.”

PSC Chair Charlotte Lane told both sides to submit additional information to support their positions by Aug. 17. The PSC will make a decision at a later date.

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