Appalachian pleads its case to lawmakers

Executives and Western Virginia lawmakers met in Wytheville

March 31, 2011
Karen Kiley/News-7

WYTHEVILLE, Va. — Appalachian Power executives took their case for rate increases to Western Virginia lawmakers Thursday morning. The company filed requests Thursday to raise rates by about 9.6%.

Company executives met with senators and delegates in Wytheville.

Lawmakers have lobbied for lower rates in the past. They’ve also passed legislation regarding rate increases. State law no longer allows power companies to collect higher interim-rates while waiting for a rate increase to be approved.

After the meeting, lawmakers said they might understand the need for a rate hike, but they don't agree with it.

"Unless Richmond changes the law, they are going to come in waves of four increases this year, there will be four next year and so on. But, what do you expect when you refuse to change the law?," questioned Del. Ward Armstrong, (D) Henry Co.

“We fight a bitter, hard fight here in the state to keep those prices down. We seem to be losing on the federal level," said Del. Bill Carrico (R) Grayson Co., in response to Appalachian Power blaming the federal environmental regulations.


“The bottom line is some of my people cannot pay the increases,” said Del. Anne B. Crockett-Stark (R) Wytheville.

"If you keep raising the rates on small business, they can't hire people," said Wythe Co. customer Nola Humphrey.

"What are you going to do, ya know? It puts it all on the backs of the regular person. It’s going to end sooner or later; they aren’t going to be able to afford it,” said Wythe Co. customer Leon Humphrey.

“All I know is, I get the bill every month and I start sweating and I start struggling trying to figure out how to pay it,” said Robert Dean, a Carroll Co. customer.

Many customers just aren't paying their bills. A record 25% of Appalachian Power's customers are now delinquent on their electric bills.

But that's not stopping the company from asking for more money.

"We recognize that the economy continues to languish. We understand that it’s very difficult for customers to pay," sympathized Charles Patton, Appalachian Power President and COO.

Appalachian Power is asking for a 9.6% rate increase.

Company President Charles Patton says complying with federal environmental regulations, like the Clean-Air Act, is the reason for the rate increase.

To build two of the company’s biggest power plants, the John Amos and Mountaineer power plants, cost the company around $500 million, said Patton.  The company has spent more than $2 billion on compliance with federal regulations since the plants were built, Patton explained.

"Eighty percent of the costs that we are seeking to recover (with the rate increase) are related to environmental costs," Patton stressed.

Appalachian Power could have asked for a much higher rate increase. The company is putting off other major projects, like building new power plants, and deferring costs for the future, as a way to keep down the rate increase, said Patton.

"We've come up with a plan where we can spread our recovery out over time, just as people sometimes manage their own person budgets to make ends meet and we’ve been able to reduce that down to $115 million dollar, or the 9.6% increase,” said Patton.

If those projects had been included, the rate hike could be as high as 24.8%.

Appalachian Power is also proposing a new way to help cut down on delinquent bills. Included in the proposal is an automatic price adjustment, where APCO would automatically lower the cost of energy in the peak winter/summer and raise it during the more mild months. The price adjustment would keep customers from seeing extremely high bills during peak months, and lessen the opportunity for people to fall behind on payments, officials said.

The rate increase will not be considered until December. If it’s approved by the state, it would not go into effect until February 2012.

APCO says your bill should stay unchanged through the rest of this year.

See related story on the requested Appalachian Power rate increase here.

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