Appalachian Power submits rate review to commission
Appalachian Power’s plan to improve service reliability and reduce the impact on low-income customers is under review after the company submitted its triennial rate review application to the Virginia State Corporation Commission (SCC).
The review allows SCC to look at Appalachian Power’s financial and operational performance and to request modifications on the base rate for service or return on equity. SCC’s last triennial review was in 2020. This latest filing comes as the company is requesting to increase rates by 16 percent, or approximately $212 million.
Appalachian Power said the increase is necessary to provide customers with safe and reliable electric service. The factors contributing to the rate modification are increased capital, depreciation, and material and labor costs related to Appalachian Power’s distribution operations and vegetation management.
“Trees and other vegetation are consistently the leading cause of outages,” said Aaron Walker, Appalachian Power president and chief operating officer. “We have an obligation to ensure our customers have access to safe and reliable service. Substantial tree removal, pruning, and brush clearing are needed to prevent and reduce the duration of outages across the system.”
The company said the additional funds would allow it to restore to its pre-2020 levels miles of right-of-way while targeting the worst-performing circuits.
Appalachian Power said the proposed increase will vary depending on customer class and usage. For residents using 1,000 kWh or fewer, bills will only increase an estimated $20 if the rate increase proposal is approved. For those using 1,000 to 2,000 kWh, bills would increase an estimated $40 per month. Additionally, the company has requested that it be allowed to eliminate the basic service charge for low-income customers. If SCC approves any increase, it will not go into effect until January 2024.
“We understand this request comes at a time when other costs are increasing for customers,” said Walker. “We have included a proposal to reduce the financial impact on our lower-income customers and will work with the SCC and others to help balance competing interests to the greatest extent possible.”