CHARLESTON, W.Va. — The state Public Service Commission has told Appalachian Power Company it will approve a base rate increase to go into effect June 1 if the utility follows through on its securitization plan and agrees to not file for another base rate increase until after June 1, 2027.
The offer came in a comprehensive order from the PSC filed Thursday dealing with various aspects of the utility’s overall rates it’s allowed to charge both residential and industrial customers. The PSC said it made the offer after learning on April 6 of Appalachian Power’s plans to file for a base rate increase. The last base rate increase went into effect on Aug. 28, 2025.
The inflation-based rate increase offered is a 4 percent increase on residential customers and 2.5 percent on industrial rates. The increase would be worth about $40 million.
The PSC order called its offer “reasonable” given the current circumstances and the expected benefits of securitization.
Appalachian Power told MetroNews it’s reviewing the offer.
“We appreciate the Commission’s recognition of the need for approaches that support reliable service while addressing customer affordability in West Virginia,” the company said. “We are reviewing this innovative framework, which is intended to provide timely rate relief and reduce the likelihood of larger rate increases in the future. Keeping costs as low as possible for our customers remains a top priority as we evaluate next steps.”
The PSC approved a securitization plan a few weeks ago allowing Appalachian Power to sell bonds.
“The Commission finds in this financing order that the securitization will result in a meaningful cost saving and rate mitigation relief to retail customers as compared to traditional financing mechanisms or traditional cost recovery methods available,” the PSC said in that order.
The PSC said the plan anticipates the payments on the debt will be less that traditional ratemaking for the securitized costs and calls for the base and other cost recovery special rates of the Companies to be reduced at the time of the bond financing.
Appalachian Power also said last fall 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,” then 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.”
Energy Efficient West Virginia Legal and Policy Director Emmett Pepper said it’s clear the PSC is trying to slow down utilities like Appalachian Power from continuing to raise rates. He told MetroNews Friday the legislature had an opportunity to do something about the issue but chose not to.
“The legislature had legislation that could have paused rate increases for a year, looked at some things that could have been done about it, and also there was a ratepayer’s bill of rights, but nothing was done,” Pepper said. “We really needed legislative action on this.”
Pepper said the last rate increase from Appalachian Power includes securitization which still hasn’t been finalized.
“There’s still no specific numbers on how much that rate increase was and they are already asking for another one,” Pepper said. “This is why we need to have a bill of rights in place and have strong protections for regular West Virginians so we can afford to live here.”
Pepper said the bills that were considered during the session should be part of special session agenda called by Gov. Patrick Morrisey.
State lawmakers passed the Utility Consumer Rate Relief Bonds Act in 2023 allowing for securitization.
Brian Abraham, the former chief of staff for U.S. Senator Jim Justice, took over as Appalachian Power president and CEO last week.