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Appalachian Power explains rising bills, pending 13.3% base rate request and securitization option
Summary
Randall Short, director of regulatory services for Appalachian Power Company, told a West Virginia legislative committee that the utility’s pending base rate request would raise rates by about 13.3% but that a securitization plan could reduce the customer impact to roughly 3.5%.
CHARLESTON, W.Va. — Randall Short, director of regulatory services for Appalachian Power Company, told a legislative committee that the company’s pending base rate request seeks roughly a 13.3% increase but that a securitization proposal could reduce the net impact on customers to about 3.5%.
Short said an average residential customer using 1,000 kilowatt‑hours (kWh) a month in West Virginia currently pays about $175; of that amount he estimated roughly one‑third is the fuel component (the NEC/EEC fuel clause) and the remainder covers base‑rate items such as plants, salaries, taxes and other operating costs. He told senators the company has not had a base rate increase since 2018 and has pending testimony and hearings before the Public Service Commission that are statutorily scheduled to conclude with a decision in August.
Why it matters: the company told the committee that much of the bill increase since 2019 stems from fuel costs and that investments in reliability and environmental compliance, plus lost large customers and population declines in southern West Virginia, are drivers in the current rate request. Short said Appalachian Power has proposed using securitization—refinancing a portion of plant investment and some storm‑related deferrals through low‑cost bonds passed into law by the legislature in prior years—to reduce customer impact.
Key numbers and programs mentioned in testimony and questioning:
- Average residential bill (1,000 kWh): about $175 (Short) - Residential bill in ~2019 for same usage: about $128 (Short) - Approximate increase since 2019: $47; about $27 attributable to fuel costs (Short) - Company’s pending base rate request: about 13.3% (Short) - Securitization proposal could reduce net increase to about 3.5% (Short) - Amount referenced for securitization: approximately $2,000,000,000 of plant and deferred storm expenses (Short) - Public Service Commission coal‑purchase disallowance under review/appeal: about $230,000,000 (Short)
Committee members asked about riders on customer bills, smart meters, plant dispatch and community impacts. Short explained several riders the company recovers on bills (vegetation management, environmental compliance, broadband deployment, Mitchell acquisition surcharge, customer relief charge from earlier securitization) and said the company maintains that meters are calibrated before installation and that the commission conducts testing when customers request it.
On coal plants and dispatch, Short said Appalachian Power’s coal fleet in PJM has capacity factors in the ‘‘40‑some percent’’ range, roughly in line with regional peers, and that dispatch is determined by PJM’s economic dispatch: the market price and fuel costs determine whether a coal unit runs on any particular day. He also noted Appalachian Power is a partial owner in major West Virginia plants (roughly 40% ownership stakes cited for some units) and that decisions about running plants must account for multi‑state ownership and cost allocation.
Short told senators the company is pursuing the base rate case while offering the securitization option to limit customer impact; he urged lawmakers to support policies that attract economic growth and new load (for example large industrial customers or data centers) so the utility can spread fixed costs over more units.
Questions from senators focused on household affordability, reliability in parts of southern West Virginia, smart‑meter accuracy and the economic tradeoffs of keeping coal generation available versus buying lower‑cost energy on the PJM market. Short described examples of rider amounts and said several riders together amount to only a modest monthly portion of a typical bill; he also said the company offers payment plans, average monthly payment options and a 20% discount for qualifying customers.
No formal committee action or vote on the company’s filings occurred during the hearing; the session recorded questions and answers and concluded after the presentation.
