CHARLESTON, W.Va. — The state consumer advocate and a group representing large energy users are asking the state Public Service Commission to hold off Appalachian Power until the summer of 2028 before allowing it to seek a base rate increase on its customers.
A recent order from the PSC was argued during a hearing Tuesday morning at PSC headquarters in Charleston.
The order grants a 2.8 percent inflationary rate hike for Appalachian Power to begin July 1 with an agreement the utility won’t seek a base rate increase until 2027. The move by the PSC earlier this spring was in exchange of Appalachian Power agreeing to the delay the base rate case which it had planned to file this year along with agreeing to go through with securitization of other costs.
Appalachian Power supports the PSC move.
Appalachian Power attorney Kurt Krieger told the PSC Tuesday the 2.8 percent increase, which equals about $40 million, helps the utility “to continue to make investments while avoiding a much larger increase.”
Krieger said the order by the PSC was “creative” and a “prompt and correct exercise of its authority.”
“This is in in the best interest of customers, the state and the utility,” Krieger said.
But the the West Virginia Energy Users Group and the state Consumer Advocates Division view the smaller, inflationary increase a little differently.
Both agreed in Tuesday testimony that it’s creative but wondered if customers have received proper notification of a July 1 rate increase and if it would be better to hold off Appalachian Power from another base rate case until the summer of 2028.
West Virginia Energy Users Group attorney Barry Naum told the PSC the inflationary increase should not be a permanent tool.
“As indicated by the commission’s order, it should be extremely limited, it should be experimental and first and foremost we also believe it should not be precedential.”
State Consumer Advocate Robert Williams said Appalachian Power should be made to wait for two years before seeking another base rate increase. He said by that time there will be better information about securitization and better information about new customers for Appalachian Power like Nucor Steel and potential data centers.
“It (the next base rate case) should be well after securitization is completed and well after we’ve had the opportunity to see the effect of these dramatic changes that hopefully should put the company at a stronger financial condition,” Williams said.
Krieger indicated to state PSC Chair Charlotte Lane the deal for this summer’s inflationary increase would be off if they have to wait another two years for a rate case.
“I highly suspect that if that would become a condition the companies could not go forward with an inflation-based adjustment,” Krieger said.