Appalachian Power, along with Wheeling Power, has refiled a rate increase request with the West Virginia Public Service Commission.
The request would increase electricity costs for customers, although the power companies submitted two rate structures for the PSC to consider, suggesting options could soften the blow.
Under traditional recovery methods, the companies have requested to increase annual revenues by about $250.5 million, or 14.12 percent. A residential customer using 1,000 kilowatt-hours a month would see a net increase in their monthly bill of about 13.54%, or $23.74, the power companies said.
As an alternative, the companies propose using securitization to mitigate the impact of their request, resulting in an overall monthly bill increase of approximately 3.8%, or $6.72, for a residential customer using 1,000 kilowatt hours. The companies also proposed a new Electricity Rate Stabilization mechanism characterized as providing stability in future rate cases and limiting the frequency of rate adjustments.
The power companies say that if the securitization option is accepted by the PSC, that would reduce the impact on customers by 70%, with an increase of approximately $75 million, and the ERS would stabilize future base rates within 3% annually.
Securitization means pooling assets and selling them as tradeable securities to investors. Essentially, the utilities are asking to take out consumer rate relief bonds. The securitization is possible because of a bill passed by the state Legislature, House Bill 3308.
“Without leveraging the 2023 securitization legislation, traditional recovery of our investments would add to the burden some of our customers already face due to rising inflation and costs across many industries,” said Aaron Walker, Appalachian Power president & chief operating officer, in a statement distributed by the company.
“We are requesting the PSC approve our securitization proposal and the ERS to lessen both near-term and long-term rate impacts.”
Since the companies’ last base rate increase more than five years ago, investments of $1.3 billion were made to upgrade and modernize the grid.
“The reliability improvements we’ve made – and will continue to make – allow us to restore power more quickly and efficiently following major storms, such as Hurricane Helene,” Walker said.
The full filing is about 4,800 pages long. So groups representing people who could be affected haven’t fully examined its details yet.
“We will be looking closely to see how this proposal would affect West Virginia families and small businesses, if approved. Members of the West Virginians for Energy Freedom coalition, including my clients, will help ratepayers understand the proposal, how it would affect them, and how to provide input on the case,” said Emmett Pepper, legal and policy director for Energy Efficient West Virginia.
Appalachian Power and Wheeling Power have about 460,000 customers in parts of 25 counties of West Virginia.
In September, the PSC rejected a $265 million rate increase request by Appalachian Power and Wheeling Power, mostly because the application had big gaps of missing financial information.
That decision acknowledged the filing could be resubmitted in a more complete form as soon as the companies got prepared.