Appalachian Power and Wheeling Power are asking for an adjusted rate increase of $297 million annually.
Currently the monthly bill for a residential customer using 1,000 kilowatt-hours is $155.66, according to Appalachian Power. If approved as filed the adjustment would add $18.41 to that amount beginning Sept. 1, 2022.
Appalachian Power has 1 million customers in Virginia, West Virginia and Tennessee (as AEP Appalachian Power). It is part of American Electric Power.
The companies made their request through a late Tuesday filing to the West Virginia Public Service Commission. It’s the kind of filing the companies generally make this time of year to adjust the amount in rates for fuel and purchased power. The proposed adjustment follows approved increases amounting to about $100 million late last year and earlier this spring.
The companies say they have been running behind by millions of dollars on recouping costs while also facing the likelihood of additional costs. The amount and the reasons relating to current events stand out in the proposed rate adjustment.
Because of volatile energy markets, the companies also suggest more frequent reviews of their Expanded Net Energy Cost filings.
“With the steep and rapid rise in energy and fuel costs over the past several months, the ENEC revenues we collect from customers have been and are projected to be significantly less than the cost of the energy provided to customers,” said Chris Beam, Appalachian Power president and Chief operations officer. “The longer that goes on the greater the deficit grows, and that’s what necessitates this request.”
He added, “It is difficult to make this filing, especially when inflationary pressures are burdening families on so many fronts. However, if the unrecovered ENEC amount continues to grow it will become even more difficult to deal with in the future.”
One of the reasons in the 141-page filing is to recoup ongoing costs of dealing with the covid-19 pandemic. Another is the rising cost of energy, particularly coal, brought on by worldwide demand.
Testimony in the filing by Clinton Stutler, natural gas and fuel oil manager for the company, describes lower natural gas prices as demand decreased during the pandemic, a rebound and then more volatility brought on by weather events and the Russian invasion of Ukraine.
Jeffrey Dial, director of coal, transportation and reagent procurement, provided written testimony that coal prices increased rapidly in the second half of 2021 as demand rose nationally and globally.
“The increase in coal demand was primarily due to increases in natural gas prices making coal the lower cost option to generate electricity,” Dial testified. “The supply of coal is projected to be constrained throughout the remainder of 2022.”
The West Virginia Energy Users Group, which represents some of the state’s biggest manufacturers, said it’s still examining the specifics of the filing but finds it worrisome.
“WVEUG is analyzing the AEP filing, but on its face, the request by APCo and Wheeling for a rate increase of nearly $300 million is patently unreasonable. Such an increase would be devastating for West Virginia manufacturing and industry, and all ratepayers captive to the AEP monopoly in West Virginia,” stated Derrick Williamson, executive director of the energy users group.
The energy users group suggested the increase could result in total rate increases approaching 40 percent for some large users, putting the companies out of range with other suppliers.
“WVEUG will certainly be intervening in the case to guard the interests of manufacturing and industry and will be closely evaluating the reasonableness and prudency of the AEP decision-making, planning, and faulty forecasting that have led to this economically disastrous rate increase proposal,” Williamson stated.
Kanawha County leaders also publicly objected to the proposed rate increase.
“This comes on the heels of a request for an increase to rates filed in March of 2022. Our citizens cannot afford any additional rate increases by the public utility companies,” stated Kanawha County Commission President Kent Carper.
“I am initially calling for a moratorium on these back-to-back rate hikes. I am also calling upon the West Virginia Legislature to exert oversight on public utilities and stop this ridiculous, continuous attack on the people of West Virginia.”