Appalachian Power seeks $61.4M more yearly, adding about $9.10 a month to bills

LYNCHBURG, Va. (WSET) — Appalachian Power is asking Virginia regulators to approve a rate increase that would raise residential electric bills by about $9.10 per month for the average customer beginning next year.

The utility has filed a request with the Virginia State Corporation Commission seeking approval for the increase, which would generate approximately $61.4 million in additional annual revenue. Appalachian Power says the increase is needed to improve reliability and maintain service while managing rising costs.

When asked what is driving the request, Appalachian Power spokesperson George Porter said the company is focused on addressing customer concerns about reliability.

Well, I think the most important thing is, you know, we’re listening to our customers. You know, we hear a lot of our customers tells us that ‘You guys are raising rates, but what am I getting for it?’ You know, so we want to improve reliability. That’s number one, you know, we want to make sure that we’re improving the reliable service to our customers,” he said.

According to the company, the additional revenue would help fund improvements to the electric grid, including tree trimming and other work designed to reduce outages and strengthen the system.

Porter acknowledged that affordability remains a concern for customers.

“Customer affordability is an issue, so we want to try to figure out a way… how do we balance that? You know, how do we provide reliable service? We have to do that. That’s an obligation to our customers, but we also have to keep the cost in mind,” he said.

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The company also points to legislation approved by Virginia lawmakers last year that allows utilities to use securitization, a financing mechanism that bundles certain costs into bonds for investors. Appalachian Power says the law has helped reduce the size of the proposed increase.

Company officials say this is the smallest rate increase request the utility has made in nearly 30 years.

“Without that APPCO Rate Reduction Act, that increase or ask would’ve been like $17.50,” Porter said.

Still, the proposal has drawn concern from lawmakers who say many Virginians are already struggling with higher costs.

The reality is, they’re doing just fine. They’d like you to believe that, but Wall Street will say a different story,” democratic delegate Sam Rasoul said. “Our utilities have some of the highest bills in the nations and we need to make sure we’re doing everything we can to protect Virginia ratepayers, because the electric bills are just way too high.”

Republican Senator Mark Peake said he understands that Appalachian Power is a business, but he said the increase is bad timing.

“Citizens are getting hammered from every angle, so I would hate to see electric rates go up,” said republican Sen. Mark Peake.

Del. Rasoul also criticized the proposed increase.

“It’s very frustrating. I believe that the largest tax increase in Virginia history has been the increase in our utility costs over the past decade. And I challenge anyone to find something different. The reality is that our electric bills are just too high,” he said.

The State Corporation Commission will review the utility’s filing, analyze supporting documentation and gather public input before making a decision.

“It’s also up to the State Corporation Commission to go through all the numbers and all the documentation to see if it’s justified. I have to tell you, my hope is that rates do not increase,” Peake said. “It’s up to us and it’s up to the State Corporation Commission to make sure they’re not taking advantage of the rate payers.”

Rasoul said he believes now is the wrong time to increase costs for consumers.

This is the worst time to be putting forward any type of rate increase. People just simply cannot handle it anymore,” he said.

The State Corporation Commission is expected to issue a final ruling by Jan. 15. If approved, the new rates would take effect in March.

Porter said if you’re struggling to pay your bills, you can reach out to them.

“We can’t help you if we don’t know you need help,” he said. “Please reach out to us either via our website or give us a call. We’ll see what we can do for you.”