Wednesday, May 27, 2015

Appalachian Power granted double-digit residential rate increase

The state Public Service Commission approved an overall $123 million or 9 percent rate increase Tuesday for Appalachian Power Company and Wheeling Power Company but residential customers will pay more.
The order spells out different percentages of increases per customer classification and for residential customers the increase is 16.1 percent a month. The average residential customer will see an increase of $19.50 to their monthly bill, which state Consumer Advocate Jackie Roberts thought is too high.
“Our position was that after evaluating the filing, we thought the appropriate level of expenses for the company would result in base rate increase of 3.49 percent,” Roberts said.
AEP Communications Director Jeri Matheny maintained that even with the increase that residential customers would still be paying below the national average. She said the increase is necessary to improve their service.
“We requested this increase about a year ago and it’s finally come to fruition,” Matheny said. “We need it mainly to improve our infrastructure. We’ve got a lot of aging infrastructure out there; the lines, the towers. And we need to invest in that to insure that electricity stays reliable and improves.”
The PSC has ordered a 1-year phase-in of the residential rate increases. The move will decrease the increase to 11.8 percent, a $14.30 increase for the average customer.
Matheny was “glad that the PSC had recognized some of the increasing costs of doing business.” Roberts felt that some further evaluation was needed of the long report, but initially the increase seemed excessive.
“We need to evaluate the order and analyze the issues addressed by the commission,” she said. “But on a first blush, this seems to be a very high increase for residential customers.”
Appalachian Power and the smaller Wheeling Power received approval to increase their base rates and approval for a surcharge to pay for a new vegetation clearing program. The PSC said the base rate increase is tied to a $407 million investment by Appalachian Power to bring its power plants into compliance with federal environmental regulations. The new vegetation program was ordered by the PSC following the 2012 derecho and Superstorm Sandy that happened later that year.