RICHMOND — The State Corporation Commission (SCC) has set a fuel rate for Virginia customers of Allegheny Power that reduces the company’s interim fuel rate (in effect since July 1) on customer bills beginning with service on November 1. The SCC’s action thus reduces the current monthly bill of a typical residential customer by nearly $2.

Under the terms of a settlement accepted by the Commission, Allegheny Power will receive an additional $16.2 million to pay for its costs of purchasing power to service customers for a 12-month period that ends June 30, 2010. The company originally sought an additional $19.4 million in fuel revenues.

Allegheny Power customers have been paying a higher, interim fuel rate since July 1, 2009 based upon the company’s request for $19.4 million in additional fuel revenues. As a result of the Commission’s decision, that interim fuel rate will be adjusted downward. For a residential customer, the new fuel rate will be 2.706 cents per kilowatt-hour (¢/kWh). On July 1, the fuel rate had increased from 2.351 ¢/kWh to 2.898 ¢/kWh.

For a typical residential customer using 1,000 kWh of electricity a month, the new fuel rate reduces the bill by $1.92, to approximately $94 a month. As a result, such customers will now pay $3.55 monthly in additional fuel charges instead of $5.47, as initially sought by the company.

The Commission determined that the stipulation negotiated between the company and the SCC staff represents “a fair and reasonable resolution of the issues.” The Commission expressed concern about the increase “and its ultimate impact on customer bills, especially at this time of economic hardship for many people and businesses in Allegheny’s service territory.” The company, however, by law is entitled to recover its prudently incurred fuel costs.

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PUE-2009-00028