AEP Story Archives - Page 2 of 5 - West Virginia Public Broadcasting

PSC Denies Appalachian Power’s $297 Million Rate Request

The PSC is currently conducting a review to determine if the $297 million in extra costs were prudently incurred. Until then, the commission said in its ruling Friday that it will approve no further increases.

The West Virginia Public Service Commission denied Appalachian Power’s request to recover $297 million from ratepayers in a case that’s generated significant public opposition.

Appalachian Power has testified to the commission that its coal supplies ran tight in late 2021 into 2022, and there were times when it could not run the plants.

The price of coal and natural gas spiked in late 2021 owing to a fast recovery in electricity demand after slumping during COVID-related closures. Russia’s invasion of Ukraine early last year also sent demand soaring and kept prices high.

Appalachian Power told the PSC it couldn’t get enough coal to fuel its John Amos, Mountaineer and Mitchell plants in West Virginia. Instead, it had to purchase power from the PJM regional grid and sought to pass along those costs to consumers.

Local governments, industrial customers, residents and consumer advocacy groups uniformly opposed the plan. If approved, it would have increased the average residential user’s monthly bill by about $18. Four public hearings were held on the request.

The PSC has been skeptical of Appalachian Power’s case. In late 2021, it stopped short of ordering the company to operate its coal plants 69 percent of the time, to take advantage of their perceived lower cost than purchased power.

It has questioned whether the company was idling the coal plants to meet the decarbonization goals of its corporate parent, American Electric Power.

Appalachian Power officials testified that decarbonization was not a reason.

Appalachian Power has argued that deferring recovery of that balance will mean an even bigger balance to recover in the future — and a steeper increase for ratepayers.

The company is suing one of its largest coal suppliers, American Consolidation Natural Resources, in Columbus, Ohio, and the New York State Supreme Court.

A recent report by Energy Innovation Policy & Technology found that new solar and wind power would be cheaper than every operating coal plant in the state.

Appalachian Power is an underwriter of West Virginia Public Broadcasting.

Federal Regulators Block Sale Of Kentucky Power To Algonquin

Kentucky Power and Wheeling Power each own half of the Mitchell power plant in the Northern Panhandle.

The Federal Energy Regulatory Commission on Thursday denied the sale of Kentucky Power to Algonquin Power. The five-member commission said the companies had not demonstrated the deal would not have an adverse impact on rates.

Kentucky Power and Wheeling Power each own half of the Mitchell power plant in the Northern Panhandle.

Last year, West Virginia regulators approved a wastewater treatment upgrade that would keep the plant in operation past 2028. Kentucky regulators, however, did not.

Following those conflicting decisions, parent company American Electric Power announced the sale of Kentucky Power to Algonquin.

Commissioner Willie Phillips, in a concurring statement, said he would have preferred that FERC conditionally approve the sale. He noted that FERC rarely denies such applications.

He also noted that the Kentucky Public Service Commission, in approving the deal in May, had required a $30 million payment to ratepayers.

Phillips was appointed to FERC by President Joe Biden.

Kentucky Power, headquartered in Ashland, has 165,000 customers in 20 eastern Kentucky counties.

In a statement, Tammy Ridout, an AEP spokeswoman, said the company was “disappointed.”

“We are thoroughly reviewing the order and are working,” she said, “to determine the best path forward to securing FERC’s approval of the transaction.”

AEP Investor Presentation Shows Cut Back On Coal In Next Decade

According to an AEP investor presentation last month, 19 percent of the company’s electricity will come from coal by 2032.

This story has been updated to clarify where and how much AEP is cutting back on coal.

American Electric Power, the parent company of Appalachian Power, will shut down half its coal fleet by 2028.

According to an AEP investor presentation last month, 19 percent of the company’s electricity will come from coal by 2032.

That’s down from 41 percent this year and down from 70 percent in 2005.

By 2032, according to the presentation, only three coal plants will be left in Appalachian Power’s portfolio: John Amos, Mountaineer and Mitchell, all in West Virginia.

Two more AEP coal plants will continue to operate in Arkansas.

The company aims to achieve an 80 percent reduction in carbon dioxide emissions by 2030, reaching net zero emissions by 2045.

AEP identifies carbon offsets and technology, such as carbon capture and storage, to achieve further emissions reductions.

Virtually all of the retired coal generation will be replaced with renewables.

Appalachian Power is an underwriter of West Virginia Public Broadcasting.

Appalachian Power Tells Virginia Customers Renewables Will Lower Their Bills

Appalachian Power told its Virginia customers last month that the solution to reducing their monthly bills is to increase renewable power and move away from coal and natural gas.

Updated on Friday, Oct. 7, 2022, at 12:40 p.m.

Appalachian Power told its Virginia customers last month that the solution to reducing their monthly bills is to increase renewable power and move away from coal and natural gas.

When Appalachian Power told customers in West Virginia of the coming rate increase in April, renewables were not mentioned. Neither was a reduction in coal, which supplies 88 percent of the state’s power.

“Incorporating more renewable sources of power into the company’s energy mix is another step in reducing customer fuel costs,” the company told Virginia ratepayers in September. “As Appalachian Power adds more renewables, there is less need for coal and natural gas to generate power.”

Appalachian Power is asking its customers in West Virginia and Virginia to pay more to account for the higher cost of coal and natural gas.

If approved by their respective states’ utility regulators, Appalachian Power’s customers could see their monthly bills increase by $18 to $20 a month.

In West Virginia, the proposal has become controversial. Residents, industrial customers and local governments have uniformly opposed the increase.

The sharply higher cost of coal and natural gas is behind the proposed rate increases in both states. Appalachian Power’s Virginia and West Virginia service territories share power generated by the John Amos plant in Putnam County and the Mountaineer plant in Mason County.

The company has sought regulatory approval in both states to make environmental upgrades to keep the plants operating past 2028.

The West Virginia Public Service Commission has approved the upgrades, but the Virginia State Corporation Commission denied them.

Virginia’s Clean Economy Act requires a transition toward renewable energy and away from fossil fuels. West Virginia has no such requirements.

Appalachian Power’s energy portfolio is 6 percent renewable, according to the company.

Chris Hamilton, president of the West Virginia Coal Association, said the savings from a renewable energy buildout was “highly suspect.”

“It’s unfortunate for AEP to denounce the use of coal with its Virginia ratepayers when it’s the reliable, baseload power from its West Virginia coal fleet that allows for the higher percentage of renewables to be developed in Virginia.”

AEP is American Electric Power, the parent company of Appalachian Power.

Phil Moye, a spokesman for Appalachian Power, said the company is “multijurisdictional,” referring to the different states in which it does business. The company serves about 1 million customers in West Virginia, Virginia and Tennessee.

“While legislators and regulators strive to act in ways that are in the best interest of their respective states,” he said, “the states’ approaches often differ.”

Moye said the Virginia Clean Economy Act imposes renewable targets West Virginia does not have, with a goal of 100 percent carbon-free electricity by 2050.

Moye added that the company is adding renewable resources in West Virginia to meet the demands of new commercial and industrial customers.

Appalachian Power is an underwriter of West Virginia Public Broadcasting.

This story was updated to include a response from Appalachian Power.

Appalachian Power: Delay In Rate Recovery Means Even Higher Bills

Next week, the West Virginia Public Service Commission will hear Appalachian Power’s request to recover $297 million from ratepayers.

The price of coal and natural gas has risen sharply since mid-2021, and rates haven’t kept up.

Local governments, residents and large industrial users have recoiled at the prospect of paying more. The average residential user’s monthly bill would increase by $18 if the PSC approves the request.

In written testimony filed to the PSC, Appalachian Power argues that its rates are on par with the national average. It further states that delaying the recovery of those costs now will mean an even bigger increase in the future.

Meanwhile, Appalachian Power is suing its largest coal supplier in Columbus, Ohio, the headquarters of its parent company, American Electric Power.

Appalachian Power alleges that American Consolidated Natural Resources (ACNR) failed to deliver coal under contract to its West Virginia power plants. As a result, the plants ran short on fuel late last year and were idled for prolonged periods of time.

Appalachian Power is seeking $45 million in damages. ACNR has filed a counterclaim, alleging that Appalachian Power failed to arrange transportation for and receive delivery of the coal.

ACNR owns the assets of what was formerly Murray Energy, which filed for bankruptcy in 2019.

Appalachian Power is an underwriter of West Virginia Public Broadcasting.

Silicon Metals Maker Says Electric Rate Increases Are 'Unsustainable'

In a filing with the Public Service Commission, a company official testified that Appalachian Power’s rate proposal could put the plant’s 244 jobs in jeopardy.

Residents and local governments have lined up in opposition to Appalachian Power’s proposed rate increase. Now, at least one large employer has joined them.

WVA Manufacturing makes silicon metals at its plant in Alloy, in Fayette County.

In a filing with the Public Service Commission, a company official testified that Appalachian Power’s rate proposal could put the plant’s 244 jobs in jeopardy.

In his testimony, Russ Lang, corporate energy manager in the Americas for Ferroglobe, says the company paid $29 million for electricity in the past 12 months – its largest single expense.

Lang says rates have already gone up 12 percent this year. With Appalachian Power’s pending request, the plant’s rates could go up another 27 percent.

Lang calls the increases “unsustainable.” The company has already idled its plant in Niagara Falls, New York, due to electric power costs.

The PSC will hear Appalachian Power’s request on Oct. 4 to recover $297 million from ratepayers. The company cites the higher cost of natural gas and coal, and the lack of availability of coal in the second half of 2021.

Low coal stockpiles at its three West Virginia power plants meant Appalachian Power had to purchase electricity from the PJM market to meet customer demands, but at a higher cost.

Appalachian Power has sued one coal supplier, American Consolidated Natural Resources, formerly Murray Energy. It’s seeking damages of $45 million over missed coal deliveries.

ACNR has countersued. Both lawsuits were filed in court in Columbus, Ohio.

Appalachian Power is an underwriter of West Virginia Public Broadcasting.