RICHMOND — The State Corporation Commission (SCC) has approved two rate increases for Appalachian Power Company (APCo). Both are less than the company originally requested.

The SCC has reduced APCo’s fuel rate beginning October 20. The fuel rate increased on an interim basis by approximately 11.7 percent on September 1. The fuel rate portion of the electric bill is a dollar-for-dollar recovery from customers of the cost of the fuel used to generate electricity.

Following the SCC’s consideration of the request, the Commission is lowering the interim fuel rate from 2.255 cents per kilowatt-hour (¢/kWh) to 2.16 ¢/kWh. For the average residential customer using 1,200 kWh of electricity per month, the SCC's decision saves approximately $1.14.

Recognizing that the price of fuel has risen significantly, particularly coal, the Commission directed its public utilities staff to monitor the cost of coal on a monthly basis. APCo primarily relies on coal-fired power plants. If staff finds evidence of a change that could lead to a downward adjustment in the fuel rate, the Commission will review the matter.

The other rate adjustment approved by the Commission involves a surcharge to recover already incurred environmental and reliability costs. The surcharge, which appears as a separate line item on the bill, can be adjusted annually.

The Commission accepted a stipulation agreed to by various case participants that allows a net increase in the surcharge of approximately $11.7 million. The approved amount is nearly $6 million less than the company sought.

The surcharge adjustment will apply to service on and after January 1, 2009. The impact on a residential electric bill will be less than two percent.

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Case Numbers:
PUE-2008-00067 - APCo fuel rate adjustment
View Order Establishing Fuel Factor

PUE-2008-00045 - APCo environmental and reliability surcharge adjustment
View Final Order