×

Deal reached between parties in Appalachian Power/Wheeling Power rate increases

(Capitol Notes - Graphic Illustration/MetroCreative)

CHARLESTON — The West Virginia Coal Association and the West Virginia Energy Users Group agreed to settle issues surrounding multiple rate requests from Appalachian Power and Wheeling Power.

In a filing Wednesday afternoon with the state Public Service Commission, the West Virginia Coal Association and the West Virginia Energy Users Group agreed to a set of proposals to submit to the PSC regarding Expanded Net Energy Costs (ENEC) requests made in 2021, 2022, and 2023 by Appalachian Power and Wheeling Power — both American Electric Power (AEP) subsidiaries serving 462,000 customers in 25 counties in the state.

“The Stipulating Parties submit that the Agreement represents a beneficial result for all interested parties and the West Virginia public and reflects substantial compromise of the issues litigated by the Stipulating Parties in these three cases,” the filing stated.

The agreement calls for the securitization of $623 million in under-recovery being sought by Appalachian Power and Wheeling Power, including $503 million in an ENEC under-recovery balance, $88 million in major storm costs through April 30 and $32 million in additional ENEC deferrals from March 1 through Sept. 30.

As part of the agreement, the power companies will forgo recovery of an additional $50 million as part of the original $553 million that was being sought by the companies as of Feb. 23 in their most recent ENEC filing.

“The Companies confirm that their agreement to forgo $50 million of ENEC costs evidences the Companies’ acknowledgment of the burden of the current ENEC under-recovery on customers and reflects the Companies’ willingness to take meaningful steps to reduce the costs borne by their West Virginia customers,” according to the settlement.

The PSC entered an order in September approving the 2023 ENEC recovery request by Appalachian Power and Wheeling Power for $88.8 million in projected costs. The approved ENEC raised residential rates by 3.5%, or and additional $5.69 per month for an average residential power user. Commercial rates increased by 5%, or an additional $21.16 per month.

The ENEC requests — made in April — included $552.9 million for an accumulated under-recovery and $88.8 million in increased projected costs.

The companies submitted two plans for the PSC to consider. One would have increased rates by $88.8 million and spread the remaining under-recovery costs across three years at an increase of 12% for ratepayers, with the first-year rate increase set at $293.1 million. The second option — made possible by House Bill 3308 passed earlier this year — allowed for securitization of the ENEC under-recovery balance.

According to the proposed settlement, the securitization will keep current rates from rising, with future rates possibly decreasing for residential and commercial customers.

The agreement is contingent upon PSC approval, a submission by the companies of their securitization filing, the issuance of a financing order by the PSC in the securitization proceeding and the companies’ consummation of the proposed securitization. The companies will file for a financing order within 90 days of any final PSC order.

The agreement calls for the companies to review and evaluate the procurement of coal and inventory targets for the Amos, Mountaineer and Mitchell power plants within six months of a final order from the PSC. The companies also agree to forgo an additional ENEC filing in 2024 unless their under-recovery between Oct. 1 and March 31, 2024, is greater than $50 million.

Steven Allen Adams can be reached at sadams@newsandsentinel.com.

Starting at $2.99/week.

Subscribe Today