April 4, 2011 – The West Virginia Public Service Commission (PSC) last week gave its approval to a controversial rate increase requested by Appalachian Power, allowing the company to raise rates by more than 4 percent.
As part of the PSC’s action, Appalachian Power and Wheeling Power were required to make two donations of $250,000 to the Dollar Energy Fund, which is part of the West Virginia Utility Assistance Program that helps low-income residents pay their utility bills. The first donation is to be made by December 31, 2011, the second by December 31, 2012.
The power companies also must allow residential customers not current in their payments the option of enrolling in the Average Monthly Payment Plan. Residential customers whose services have been terminated will now be allowed to roll arrearages, deposits and reconnection fees into a deferred payment plan.
The Dollar Energy Fund was founded in 1983 in Pennsylvania and is the state’s largest fuel fund and the fourth largest in the U.S. It began operating the West Virginia fund in October of 2008. In addition to its assistance programs in Pennsylvania and West Virginia, it also operates them in Ohio, Maryland, Virginia and Tennessee.
The rate increase is a third of what the company originally requested. Appalachian Power and Wheeling Power, subsidies of American Electric Power, requested a rate increase of about 13.8 percent, or $155,463,299, annually in May. The Consumer Advocate Division, commission staff and the power company in December recommended in a joint stipulation an increase of 5.36 percent, or $60 million annually.
Commissioners slashed that recommendation even further to 4.6 percent, or about $51.1 million a year, and nearly $9 million less than the commission staff and Consumer Advocate Division's recommended increase.
Commissioners allowed Appalachian Power a lower rate of return, limited the recovery of storm damages and excluded all executive bonuses or supplemental compensation, according to a statement issued by the PSC. They also recognized the savings in rates from the decreased number of employees from the company's employee severance programs.
The PSC received hundreds, if not thousands, of letters from state residents protesting the increase. A public hearing on the matter drew a standing room only crowd.
Source: Charleston Daily Mail, PSC