According to testimony at the Virginia State Corporation Commission last month, the West Virginia Public Service Commission may be driving up customer rates in Virginia.
Two of West Virginia’s coal plants supply electricity to Virginia customers of Appalachian Power.
Gregory Abbott, a former staff member on the Virginia commission, testified on behalf of Appalachian Voices that Appalachian Power operates its coal plants when they can’t make money because the West Virginia PSC told it to run them more often.
The company is asking for a $10 a month increase in average residential bills in Virginia.
Abbott says Appalachian Power bought too much coal and is burning it when conditions are not economically justified because of the West Virginia PSC’s mandate.
Abbott recommended that the Virginia commission closely monitor Appalachian Power’s coal plant operations in West Virginia.
In January, the West Virginia PSC blocked Appalachian Power from recovering $231 million in fuel costs from ratepayers. That decision, Abbott says, puts pressure on Appalachian Power management “to take more chances and risks with ratepayer costs” in its decisions to run the plants “to avoid the possibility of future cost recovery disallowances by the WV commission.”
“In other words,” Abbott added, Appalachian Power “may take on more risks to Virginia ratepayers to avoid the risk to shareholders attendant to the WV commission order.”
Appalachian Power appealed the commission’s January order to the West Virginia Supreme Court. Oral arguments are scheduled for Sept. 4.
West Virginia Public Broadcasting has asked the West Virginia PSC for comment.
In West Virginia, Appalachian Power seeks to increase average residential bills by $28 a month and also is pursuing a $2 a month increase in fuel costs.
The PSC heard the fuel cost case this week and has suspended the rate increase until next May.
An energy analyst testified to the PSC that Appalachian Power lost $87 million on its three West Virginia coal plants in a recent 12-month period. Two of those plants, John Amos and Mountaineer, supply electricity to Virginia customers.
An Appalachian Power witness told the PSC the company ran the plants at a loss to manage excess coal inventory, which he said posed a safety risk to plant workers.