ROANOKE, Va. – Just months after Appalachian Power Co. (AP-CO) customers saw their bills rise by $16, the company is seeking another rate increase, drawing criticism from customers and lawmakers alike.
The Virginia State Corporation Commission (SCC) is set to review Appalachian Power’s biennial rate request on Tuesday. Initially, the proposed increase amounted to an additional $10 per month for the average customer. However, after backlash from consumers, the company has revised the proposal to a $6.75 monthly hike.
Critics argue that the request comes too soon after the last increase. Clean Virginia sent a letter to the SCC with over 3,000 signatures from Appalachian Power customers asking them to deny the rate proposal.
“This type of return on equity increase coming just six months after the last one is unheard of,” Kendl Kobbervig said. They just got a massive bump in profits. They do not need another one only six months later.”
10 News was unable to get an on-camera interview with someone from Appalachian Power. However, we were able to ask questions via email and here are the responses.
Why is the rate increase Appalachian Power is proposing necessary?
Appalachian Power serves 545,000 customers across southwest and central Virginia. The company’s biennial rate review application filed in March with the Virginia State Corporation Commission (SCC) includes the base rates necessary for the utility to continue to provide safe and reliable electricity for its customers.
Appalachian Power
Why is Appalachian Power requesting this increase when a rate increase just went into effect earlier this year?
Appalachian Power must file every two years for a base rate review under state law enacted last year (2023). This is the utility’s first application under the new state law, which required the company to file in 2024. Reviews are an opportunity for the SCC to examine the company’s financial and operational performance, and any request to modify base rates for service.
Appalachian Power
What sort of factors are leading to this rate increase?
Several factors contributed to the company’s request to modify rates. These include cost recovery for restoring service during major storms, increases in capital, material and labor costs, and rising interest rates. The application also includes the costs associated with the company’s tree and brush trimming program to improve service reliability for customers in areas prone to tree-related outages.
Appalachian Power
Have there been any discussions about rate decreases?
Appalachian Power filed to increase the base rate charge for electricity because costs directly related to this specific charge increased. When costs decrease the company will file to lower the charge. Indeed, earlier this year, the company filed to lower the transmission cost for customers (this is a separate filing from the base rate). The transmission rate adjustment clause, known as the T-RAC, is the portion of a customer’s bill that recovers costs for transmission services, fees and new construction.
Appalachian Power
Despite the company’s reasoning, some legislators are urging the SCC to deny the increase.
“The only reason they’re asking for this is to increase their profits,” Del Sam Rasoul said. “This is the wrong time to put more pressure on customers, especially when people are already struggling with inflation and trying to make ends meet.”
With the SCC’s decision looming, both consumers and lawmakers are hoping the final push will influence the outcome.
The SCC is expected to rule on the proposal on Tuesday.
If you want an idea of how much you are spending on electricity each month, Appalachian Power has an energy calculator.