CHARLESTON, W.Va. — Appalachian Power Company is seeking its first base rate increase since 2019 but a group representing its largest customers says rates have gone up significantly in other ways since then.
The state Public Service Commission began an evidentiary hearing Tuesday in Charleston on Appalachian Power’s request for a $250.5 million increase in rates on its 461,000 customers in West Virginia.
More specifically the case, which was initially filed last November, seeks a 13.5 percent increase on residential customers, meaning the average customer would pay about $23.74 more a month for electricity if the entire increase is approved.
One of the groups opposing the increase is the West Virginia Energy Users Group, which is made up of Appalachian Power’s largest users including industrial operations operated by Chemours and Constellium. WVEUG attorney Barry Naum agreed there have been no rate cases for Appalachian Power since 2019 but there have been 25 other proceedings before the PSC where the utility has asked for $623 million more from its customers to pay for things like fuel, environmental requirements for its power plants, vegetation removal and other surcharges.
Naum questioned Appalachian Power Company President Aaron Walker about the increased costs on customers at Tuesday’s hearing.
“Are you concerned for the competitive viability of those customers?” Naum asked Walker.
“Do I want our customers to be successful? Absolutely,” Walker said.
“You would not want those customers to have to relocate to another state due to the high cost of the rates here in West Virginia would you?” Naum countered.
“I wouldn’t want that to happen but I’m not saying that these numbers would cause that to happen,” Walker said.
Naum said there’s a constant drumbeat of rate increases and that’s impacting industrial customers.
“Can you see how it has become very difficult for them to absorb (increases) over the last five or six years?” Naum asked Walker.
“I say in speaking with customers that our customers say constant adjustment to rates can be a challenge and that’s why we’ve proposed the mechanisms we have proposed in this rate case,” Walker said.
Appalachian Power has also asked the PSC to allow it to securitize the money its needs by selling bonds on Wall Street and setting up a new rate-making method that would allow the company to collect money from customers over a long period of time cutting down on the number of surcharges and rate cases. Virginia regulators have approved a similar plan for Appalachian Power in that state.
Walker said it was a win for customer affordability in Virginia. Naum characterized it as a regulatory win for the utility and its investors.
Dozens of Appalachian Power customers spoke during a public hearing Tuesday evening.
Lauri Fuller says rates are already too steep.
“I think AEP rates are already too high. West Virginia has a lot of working poor, and this rate increase will put yet another burden on the West Virginia folks,” Fuller said.
Valery Staskey says this is a tough economic time in a state with many struggling, and this increase won’t help matters.
“I cannot imagine how people with less than I are surviving. What AEP is proposing, once again, is not just a rate hike, it’s a hardship,” Staskey said. “It’s a threat to health, safety, and human dignity. It puts impossible choices in front of people who are already stretched to the breaking point.”
Fuller brought up that AEP needs to consider saving money on their end before bringing a rate hike to the table.
“How has AEP shown any cost-saving actions? Have they done anything to show how they’ve made any cuts to help their costs, rather than to put this burden on customers,” Fuller asked. “AEP has a monopoly in our areas that they service, and West Virginians don’t have any other choice for service, so we’re basically stuck.”
Mercer County Delegate Marty Gearheart, who serves on the House Finance Committee, spoke during the hearing. He says AEP can likely make some cuts.
“In looking at very large budgets over time, I’ve been able to observe that there’s rarely a point in time where there are not items of spending that cannot be considered for reduction or elimination,” Gearheart said.
The PSC is expected to make a final decision on the rate case by this fall.
The PSC has a virtual public hearing scheduled on the rate increase at 5:30 p.m. Tuesday.