Tag: Appalachian Power

Appalachian Power Could Take Legal Action Against PSC, Chief Says

In a decision Tuesday, the PSC denied the recovery of $232 million of the $553 million the company sought from electricity customers to account for higher fuel and purchased power costs from 2021 to last year.

Appalachian Power said it’s exploring legal options against the West Virginia Public Service Commission (PSC).

In a decision Tuesday, the PSC denied the recovery of $232 million of the $553 million the company sought from electricity customers to account for higher fuel and purchased power costs from 2021 to last year.

The PSC did allow the recovery of $321 million over 10 years. That amounts to $2.50 a month on the average residential customer’s bill, and they will begin paying that on Sept. 1.

In a statement, Appalachian Power President and Operating Chief Aaron Walker called the commission’s ruling “disappointing and deeply troubling.”

“Through the information and facts we presented to the commission, and the relevant legal standards, it is our position that no disallowance was warranted,” Walker said. “We are studying the order in detail and will explore all legal remedies available to us.”

The PSC paid an outside consultant to review Appalachian Power’s fuel procurement and power plant management practices during the past three years. It concluded that the company did not respond quickly enough to changes in the coal market, nor did it run its power plants when it was most economical to do so.

The company countered that it had managed its operations the best it could under challenging conditions. The economic rebound in 2021 led to a surge in demand for electricity, pushing up the price of coal and natural gas.

In 2021 and 2022, Appalachian Power and other utilities found themselves short of the coal they needed to operate their plants.

The company sought approval of a settlement that would have spread the cost out over 20 years and reduced the requested amount to $503 million.

The Kanawaha County Commission was among those opposing the settlement. The commission asked the PSC to reject the company’s entire request.

Still, commissioners applauded the PSC’s decision on Wednesday.

“It sends a clear message that excessive rate hikes will not go unchallenged, and utility companies must be held accountable for their actions,” Commissioner Ben Salango said in a statement. “We will continue our fight for fair utility rates that reflect the economic realities facing our community.”

Appalachian Power is an underwriter of West Virginia Public Broadcasting.

PSC Denies Part Of Appalachian Power’s Fuel Cost Recovery Case

In a decision Tuesday, the PSC denied nearly $232 million in fuel costs, while approving $321 million, to be recovered over 10 years.

Bringing a nearly two-year case to a close, the West Virginia Public Service Commission denied part of the fuel costs Appalachian Power sought to recover from electricity customers.

In a decision Tuesday, the PSC denied nearly $232 million in fuel costs, while approving $321 million, to be recovered over 10 years.

The average residential customer will pay $2.50 more per month for those 10 years. Customers will begin paying the new rates on Sept. 1.

The PSC also denied a proposed settlement by the West Virginia Energy Users Group and the West Virginia Coal Association to recover fuel costs and other expenses over 20 years at a cost of nearly $3 billion.

The commission staff and the Kanawha County Commission opposed the settlement.

Appalachian Power had sought to recover about $553 million through the beginning of 2023 and an additional $88 million for the year beginning Sept. 1, 2023.

The PSC said the company did not properly manage its coal supplies in 2021 and 2022, leading it to buy coal and purchased power at higher prices. The commission said customers should not have to bear all of those excess costs.

Many power companies struggled with the high cost of coal and natural gas beginning in 2021 after the economy began to recover from the COVID-19 pandemic. Russia’s invasion of Ukraine in early 2022 pushed prices even higher.

Rail and barge availability issues also put pressure on coal supplies at power plants in West Virginia. Appalachian Power at one point sued its largest coal supplier over missed deliveries. The companies eventually settled.

Both coal and natural gas prices have fallen in recent months.

Appalachian Power is an underwriter of West Virginia Public Broadcasting.

Proposal To Settle Appalachian Power Fuel Costs Draws Opposition

The West Virginia Energy Users Group and the West Virginia Coal Association have proposed to pay off about $500 million in excess fuel costs incurred since 2021 by securitizing, or spreading out the payments over 20 years.

A settlement has been proposed to pay off hundreds of millions of dollars in Appalachian Power costs. But not everyone supports it.

The West Virginia Energy Users Group and the West Virginia Coal Association have proposed to pay off about $500 million in excess fuel costs incurred since 2021 by securitizing or spreading out the payments over 20 years.

However, the Public Service Commission staff, the state Consumer Advocate Division and the Kanawha County Commission oppose the deal.

It is not immediately clear what impact the settlement would have on rates. Appalachian Power customers will have to pay more per month to deal with the costs under any scenario.

The Consumer Advocate Division has asked the PSC to schedule a supplementary hearing on the settlement.

Securitization isn’t typically used to pay for routine costs such as purchasing fuel. 

Rather, it’s designed to help states retire coal-burning power plants before the end of their useful life and replace them with more economical or less carbon-intensive electricity generation.

Appalachian Power is an underwriter of West Virginia Public Broadcasting.

Appalachian Power Seeks Increase To Environmental Surcharge

The company wants an additional $37.2 million to meet federal environmental regulations at its three West Virginia power plants.

Appalachian Power wants an increase to its environmental compliance surcharge, and it could result in higher monthly bills.

If the Public Service Commission approves Appalachian Power’s proposal, most customers would see their monthly bills go up by 1.7 percent, or $2.84.

The company wants an additional $37.2 million to meet federal environmental regulations at its three West Virginia power plants.

The Mountaineer, Mitchell and John Amos plants are being upgraded to comply with rules for the disposal of coal ash and treatment of wastewater.

In 2021, the PSC approved those costs. The plants also serve Virginia customers, and the State Corporation Commission approved them last year.

The Kentucky PSC, however, did not approve all of the costs for the Mitchell Plant, which serves Kentucky Power customers. Now, West Virginia customers may have to make up the difference.

Appalachian Power is an underwriter of West Virginia Public Broadcasting.

Mountaineer Gas Customer Bills Could Decrease If PSC Approves Plan

Under a proposed settlement filed last Friday, the rates would increase by 4 percent. However, the Kanawha County Commission said on Tuesday that rates would decrease if the PSC approves the plan.

Mountaineer Gas customers may get a break on their monthly bills if the Public Service Commission approves a settlement.

Mountaineer asked the PSC in March to approve a roughly 6 percent increase in base customer rates, effective Jan. 1, 2024.

Under a proposed settlement filed last Friday, the rates would increase by 4 percent. However, the Kanawha County Commission said on Tuesday that rates would decrease if the PSC approves the plan.

That’s because the increase would be offset by a reduction in the Purchased Gas Adjustment and Infrastructure Replacement and Expansion programs.

According to the commission, the current average monthly cost to residential gas users is $98.30. Under the proposed settlement, the average would decrease to $88.69, a savings of $9.61.

The PSC last month approved an increase for Appalachian Power customers. An increase for West Virginia American Water customers is pending.

PSC Approves $89 Million Rate Increase For Appalachian Power

The companies had sought to recover $642 million. The commission deferred a decision on the remaining balance.

The West Virginia Public Service Commission (PSC) has approved a partial rate increase for Appalachian Power customers.

On Wednesday, the PSC approved nearly $89 million in fuel costs for Appalachian Power and Wheeling Power, to be paid for by electricity users.

The companies had sought to recover $642 million. The commission deferred a decision on the remaining balance.

The under-recovery of fuel costs goes back to 2021, when electricity demand surged following the COVID-19 lock downs. The price of coal and natural gas spiked, and Appalachian Power found itself running low on coal supplies at its three West Virginia power plants.

The full $642 million would have cost the average residential user almost $20 a month. The $89 million will increase monthly bills by closer to $5.

The PSC held multiple days of hearings in Charleston last week on the matter, in addition to four public comment hearings statewide over the summer.

Appalachian Power is an underwriter of West Virginia Public Broadcasting.

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