In an order issued last week, the Public Service Commission (PSC) of West Virginiaapproved a settlement agreement in the Appalachian Power and Wheeling Power Expanded Net Energy Cost (ENEC)case.
New rates go into effect July 1, and also include part of a base rate case increase approved last year by the PSC but not yet put in rates. Overallrates for Appalachian and Wheeling residential customers in West Virginia will increase about 10 percentandthen remain stablefor 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, like commercial or industrial customers, will vary. The increase brings Appalachian’s rates to about the national average of 12.26¢/kWh.
Residential Customer Usage and Costs
Usage in kWh Current Rate New Rate Increase % Increase
1,000 $109.82 $120.93 $11.11 10%
2,000 $205.59 $227.81 $22.22 11%
The agreement provides for a $55 million increase in the companies’ revenues, which includes a $17 million construction surcharge designed to recover costs for construction of transmission facilities and the cost of converting the Clinch River Plant from a coal-fired to a natural-gas fired plant.
“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 Charles Patton, Appalachian Power president and COO.
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 Apr. 1, 2018. Thus, rates for Appalachian and Wheeling customers in West Virginia will remain stable at least until July 1, 2018.