Appalachian Power, Wheeling Power file to recover rising costs in West Virginia

Published on March 03, 2020 by Chris Galford

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Faced with rising fuel and vegetation management costs over time, both Appalachian Power and Wheeling Power this week filed to recover some of those costs with the Public Service Commission of West Virginia (PSC) and proposed a new arrangement.

The filings were made under the Expanded Net Energy Cost (ENEC) and Vegetation Management Program (VMP). ENEC reimburses companies for coal and natural gas used to fuel power plants, as well as for purchased power. The VMP reimburses for vegetation management in right-of-way areas.

“Over time, costs have risen, and these filings seek to address that reality so that the amount being collected in customer rates matches the amount of costs that the company is incurring for fuel, purchased power and vegetation management costs,” Appalachian Power President and COO Chris Beam said.

The company’s proposal would increase ENEC rates by $82 million and VMP rates by $70 million, somewhat moderated through creative use of the Tax Cuts and Jobs Act of 2017. It would use the remaining tax reform balance from that act — $52 million — to offset the jump, with the end result being a net rate increase of $100 million. For the average residential customer using 1,000 kilowatt-hours per month, that would represent a $13.88 increase on their bill or a 10.9 percent hike.

However, Appalachian Power said that this would allow it to recover ongoing ENEC and VMP costs alike, along with around $90 million of those costs left unrecovered since the end of 2019. Appalachian Power, which oversees 1 million customers throughout the region, last increased these rates in West Virginia in July 2016.