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Appalachian, Wheeling Customers Start Paying More for Power

July 6, 2016 By Cheryl Kaften

In an order issued on June 30 (Docket No. 16-0239-E-ENEC), the Public Service Commission (PSC) of West Virginia approved a settlement agreement in the Appalachian Power and Wheeling Power Expanded Net Energy Cost (ENEC) case.

Both Appalachian and Wheeling are subsidiaries of American Electric Power (AEP). Both Appalachian Power and Wheeling Power are subsidiaries of American Electric Power. AP serves about 1 million customers in West Virginia, Virginia and Tennessee. WP serves the northern panhandle of West Virginia, including Wheeling, which has a population of about 31,400.

Under the Joint Stipulation, rates will increase by approximately $55.1 million annually – about half the amount originally requested in the PSC filing. Of that amount, $17 has been requested to cover the cost for construction of transmission facilities, as well as the price tag for converting the Clinch River Plant from a coal-fired to a natural-gas fired plant.

New rates went into effect on July 1, and also include part of a base rate case increase approved last year by the commission, but not yet included in customer bills.

Overall, rates for Appalachian and Wheeling residential customers in West Virginia will increase about 10 percent and then remain stable for at least two years.

Rates for West Virginia residential customers will increase approximately one cent per kilowatt-hour (kWh) – or from 11¢/kWh to 12¢/kWh. The increase for other customer classes, such as commercial or industrial customers, will vary. Customers using 2,000 kWh/month will see an increase of about $22 on their bills – raising them from $205.59 to $227.81, or 11 percent.

All the parties to this case – the PSC staff, the Consumer Advocate Division, and the West Virginia Energy Users Group – worked very hard to reach a compromise that would minimize the impact on customers and still allow the company to recover its costs,” said Appalachian Power President Charles Patton.

The settlement agreement spreads the recovery of past ENEC costs over two years instead of just one, which reduces the amount of the increase. The ENEC is designed to reimburse past and ongoing costs of fuel (primarily coal) and purchased power. It is a dollar-for-dollar pass-through expense that includes no profit for the companies and is adjusted up or down annually.

As part of the agreement, the companies agreed not to request a change in ENEC rates in 2017. The companies also agreed not to file a general rate case before April 1, 2018. Thus, rates for Appalachian and Wheeling customers in West Virginia will remain stable at least until July 1, 2018.

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