Appalachian Power denied rate increase by SCC

A rate increase sought by Appalachian Power Co. has been denied by the State Corporation Commission.

According to a statement issued by the SCC on Tuesday, Appalachian Power was seeking to increase rates by approximately $10 per month for a typical residential customer using 1,000 kilowatt hours of electricity. Appalachian Power earned profits that were within the range authorized by Virginia utility law for calendar years 2017, 2018 and 2019, determined by the SCC’s triennial financial review of the utility, through which it was seeking a rate increase.

The company will not receive a rate increase, and customers are not due refunds.

The company’s authorized rate of return on equity during the three-year review period was 9.42%. After reviewing the reasonableness of the company’s expenses and revenues during the period, the SCC determined the company earned slightly above that level. The commissioner also set a new authorized rate of return on equity of 9.2%, the rate that will be used to evaluate the company’s earnings during the next triennial financial review case in 2023. It will also be the return used for any new rate riders or adjustments to existing riders.

The SCC also made the following determinations:

• Denial of the company’s request to apply the 2015 planned retirements of three coal-fired power plants to 2019 earnings
• Denial of a request to increase the residential basic service charge from $7.96 to $14
• Denial of implementation of a residential rate design that would have charged higher rates during summer months and lower rates during the winter.
• The company will continue charging the same residential rate year-round.
• Approval of voluntary energy efficiency rate schedules to provide residential customers with pricing signals that shift consumption to hours when demand and prices are lower

Appalachian Power serves about 1 million customers in Virginia, West Virginia and Tennessee. Its Virginia service area includes Southwest Virginia and the Roanoke and New River Valley regions.

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