The Public Service Commission (PSC) of West Virginia late yesterday approved the third-year amount of a four-year phase-in of increased costs for Appalachian Power and Wheeling Power, both subsidiaries of American Electric Power. The order means Appalachian Power and Wheeling Power residential customers will see an increase in their electric bills of about 19 cents a day.

Residential customers who use 1,000-killowatt-hours a month will see their monthly bill rise from $90.95 to $96.75, an increase of 6.38 percent. The increase for other customer classes, like commercial or industrial customers, will vary slightly.

Residential Customer Usage and Costs

This was not a new request; rather the phase-in of increased rates was approved by the Commission in 2009. It is designed to recover extraordinary costs for coal and purchased power incurred in 2008, when coal costs spiked to unprecedented levels. Following the dramatic increase in the cost of coal, Appalachian sought the PSC’s approval to adjust rates upward in a series of annual steps rather than in one single large increase. The PSC granted permission to phase in the required rate increases over a period of four years as a way to lessen the impact on customers.

The Expanded Net Energy Cost (ENEC), as it is called, includes the companies’ annual adjustment of rates for fuel and purchased power expenses, which are passed through to customers on a dollar-for-dollar basis with no profit for the company.

The ENEC also includes some environmental construction costs. Appalachian Power this year completed a six-year, $2 billion program to install environmental controls on its Mountaineer and John Amos plants.

And, yesterday’s order includes the savings associated with the Dresden Plant, a plant being built in Ohio that will serve Appalachian’s customers. The net effect of adding the Dresden Plant to Appalachian’s generation fleet is a cost reduction for customers, because once the plant is complete the company will be able to provide more of its own power for customers, displacing some higher cost purchased power. Costs for the Dresden Plant will be recovered after the plant goes into service.

Rates for Appalachian’s customers are well below the national average. The national average residential price for electricity is 11.6 cents per kilowatt-hour, compared to Appalachian’s new rate of 9.7 cents. Appalachian offers several ways to reduce the impact of the increase on customers:

• The best way to manage the spikes caused by winter heating and summer cooling is to sign up for the Average Monthly Payment Plan, which evens out monthly bills.
• Appalachian Power launched several new energy efficiency programs earlier this year for residential customers:
  • SMART Lighting Program – Customers can receive instant rebates on ENERGY STAR® lighting, including CFLs, at select retail stores. A list of participating stores is available at AppalachianPower.com.
  • Home Energy Audit – A professionally trained energy specialist will come to your home and help you assess how much energy your home uses and evaluate what measures you can take to improve efficiency. For more information, call 1-888-446-7719.
• Low Income Weatherization Program – The Low Income Weatherization Program provides weatherization products and services to residential customers in need to help reduce their energy bills and improve their homes’ comfort. Please locate your local Community Action Agency by visiting www.communityactionpartnership.org or by calling 1-304-347-2277.

·                     Customers have the power to control their energy use. Appalachian Power’s website (www.AppalachianPower.com) has a section dedicated to simple energy efficiency tips.

Appalachian Power provides electricity to 1 million customers in Virginia, West Virginia and Tennessee (as AEP Appalachian Power) and Wheeling Power provides electricity to customers primarily in Marshall and Ohio counties in West Virginia. Both companies are units of American Electric Power, one of the largest electric utilities in the United States, with more than 5 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s largest electricity transmission system, a nearly 39,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined.