CHARLESTON, W.Va. — The net-effect of recent decisions from the state Public Service Commission concerning Appalachian Power is expected to decrease rates in the short-term and reduce the number of times the utility is returning to the commission for additional rate adjustments.
In the past week, the PSC has approved a base rate increase of $76 million, when the company was seeking a $250 million increase, and approved a securitization plan, that will allow Appalachian Power to sell $2.4 billion in bonds on Wall Street to cover investments and expenses.
“Even though we aren’t raising rates now, we are hoping that with the securitization when that comes through, after several months, the rates will not be raised,” PSC Chairman Charlotte Lane told MetroNews this week.
Lane said the PSC is trying to balance keeping Appalachian Power a strong company while at the same time keeping rates down for customers.
Appalachian Power said it’s been looking for ways to help customers.
“When we originally filed our case in 2024, we were focused on finding innovative ways to reduce the financial burden on our customers,” Appalachian Power President and CEO Aaron Walker said. “We are pleased that the PSC agreed with our recommendation and saw the benefit of securitization to provide some relief to our customers.
”State lawmakers passed the Utility Consumer Rate Relief Bonds Act in 2023.
West Virginia Consumer Advocate Robert Williams said allowing the utility to cover its costs through consumer rate relief bonds is a way to smoothing our rates and stabilizing them for a long term.
Williams said securitization will also cover smaller surcharges that the company has sought in recent years.
“You’ll see fewer rate increases because we got rid of a lot of surcharge so there won’t be all of these small adjustments that you’ve been seeing from time to time,” Williams told MetroNews.
Energy Efficient West Virginia Legal and Policy Director Emmett Pepper said allowing Appalachian Power to securitize will save ratepayers from paying the company’s return on equity.
“Instead of having that 10 percent or 9 percent tacked on top, if you securitize over time it’s going to be a lower percentage by selling bonds,” Pepper said.
Customers speaking out was a factor
Pepper said there were 5,000 comments submitted to the PSC on the rate case. He said that’s the most in the history of any rate case and he believes took those comments seriously.
Lane said they’ve been listening.
“We’ve heard you and we are doing our best to manage your utility bills and we think we’ve come up with a solution,” Lane said.
Moving forward
Williams and Pepper both said they will keep an eye on Appalachian Power’s coal costs.
“We’re still concerned about making sure making sure coal costs are reasonable and the plants are efficiently and economically operated and if that happens it will set things on course and we won’t see as many rate increase long-term,” Williams said.
Pepper said there were times in recent years that Appalachian Power could have purchased power off the grid cheaper than what it cost to burn coal.
“They had ordered way too much coal and they had to burn money–they had to burn the coal just to get rid of it so they didn’t have too much,” Pepper said. “What we found that there’s $150 million in losses that are going to be passed on to ratepayers.”
Williams said the two orders are steps in the right direction.
Other items in the orders
–The Public Service Commission has ordered Appalachian Power to contribute $1 million to the Dollar Energy Fund to help customers who are struggling to pay their power bills.
“We want to help those customers who are having a hard time making ends meet,” Lane said, adding the commission came with that move on its own.
The commission increased the amount a customer can receive from Dollar Energy from $300 to $500.
–The base rate case doesn’t discourage residents who want to use solar energy.
The order does call for the 1:1 credits for net metering to end but those who are grandfathered in will have the agreement for an additional year, Pepper said.
“I think if we had our druthers we would have 1 to 1 but this is a fair outcome,” Pepper said.
Solar United Neighbors WV State Director Leah Turgeon further explained the solar energy component.
“Although we are losing the 1:1 retail credit, The PSC’s decision on the new bill credit rate preserves the right of West Virginians’ to participate fairly in our energy system. Under this order, solar owners and those who wish to take control of where their energy comes from will continue to benefit from distributed solar power into the future— a win for West Virginia’s solar industry and residents alike,” Turgeon said.