SCC Denies Appalachian Power Request for Rate Increase

RICHMOND – Appalachian Power Company has earned a rate of return (profit) that is within the range authorized by Virginia utility law for calendar years 2017, 2018 and 2019. The State Corporation Commission (SCC) made the finding following a triennial financial review of the company in which it was seeking an increase in rates.

The SCC order means Appalachian Power does not receive a rate increase. And, it means customers are not due refunds. The company was seeking to increase rates by approximately $10 per month for a typical residential customer using 1,000 kilowatt hours of electricity.

The company’s authorized rate of return on equity during the three-year review period was 9.42 percent. After reviewing the reasonableness of the company’s expenses and revenues during the period, the Commission determined the company earned slightly above that level.

The Commission also set a new authorized rate of return on equity of 9.2 percent. That is the rate that will be used to evaluate the company’s earnings during the next triennial financial review case in 2023. It will also be the return used for any new rate riders or adjustments to existing riders.

In its final order, the Commission made the following determinations:

• denied the company’s request to apply the 2015 planned retirements of three coal-fired power plants to 2019 earnings.
• denied a request to increase the residential basic service charge from $7.96 to $14.
• denied implementation of a residential rate design that would have charged higher rates during summer months and lower rates during the winter. The company will continue charging the same residential rate year-round.
• approved voluntary energy efficiency rate schedules to provide residential customers with pricing signals that shift consumption to hours when demand is less, and prices are lower (Smart Demand and Time-of-Use).

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Contact: Ken Schrad, 804-371-9858

Case Number PUR-2020-00015 – Application of Appalachian Power Company for a 2020 triennial review of its base rates, terms and conditions
View Final Order