Tag: Appalachian Power

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.

PSC Hid Terms Of Contract With Consultant. Then, Cost Doubled

The PSC contracted with Critical Technologies last year to review the fuel management practices of Appalachian Power at its three West Virginia power plants.

The price of a contract between the West Virginia Public Service Commission and an Arizona consulting firm nearly doubled, but the reasons are not clear.

On July 19, the PSC and Critical Technologies Consulting, of Mesa, Arizona, agreed to a change order that increased the cost of their contract from $288,000 to $522,000.

The PSC contracted with Critical Technologies last year to review the fuel management practices of Appalachian Power at its three West Virginia power plants.

Critical Technologies was the winning bidder among four firms that submitted proposals.

WVPB obtained the change order through a Freedom of Information Act request.

The document did not explain why the change was made or what additional services were provided. 

The consultant’s report could influence the PSC’s decision on whether to approve the utility’s application to recover $641.7 million from electricity users in West Virginia – a potential $20 a month increase on their bills.

The PSC held an evidentiary hearing on the matter this week.

PSC filings concealed information about payments and services involving Critical Technologies and its three rival firms. The agency cited “trade secrets” as justification for shielding those details from public view.

In a June filing, the PSC warned that disclosing pricing information risked increasing the cost of contracts to the agency.

Patrick McGinley, a professor at the West Virginia University College of Law, said government agencies should be transparent about how they spend public funds.

“Contracts should be public,” he said.

For example, McGinley, said, WVU President Gordon Gee’s contract is publicly available, with no redactions, or information concealed from public view.

So is a contract the PSC agreed to just this week. The agency will pay Van Reen Accounting LLC $122,000 to perform an audit to determine whether Mon Power electricity customers in West Virginia should be reimbursed for company lobbying expenses related to the HB 6 scandal in Ohio.

A decade ago, the railroad companies Norfolk Southern and CSX sued a Maryland agency to prevent the public disclosure of information about flammable crude oil shipments by rail. A judge ruled against the railroads and in favor of the news organizations requesting the data through open records law. The railroads lost a similar effort in Pennsylvania.

Invoking exemptions to open records law is not always justified, McGinley said.

“They hope people go away,” he said. “And they usually do.”

A spokeswoman for the PSC could not explain why the price of the Critical Technologies contract nearly doubled, nor what additional services the consulting firm provided.

Appalachian Power is an underwriter of West Virginia Public Broadcasting.

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