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As of Saturday, Appalachian Power Co. is charging an average residential customer a total of about 15.5 percent more per month for electricity — a calculation based on a residential customer who consumes 1,000 kilowatt hours a month.
According to Appalachian, the monthly electric bill for this customer will increase from $100.14 to $115.78.
“Any bills sent out [today, Monday] or later will include the new rate,” said Todd Burns, a spokesman for the utility. He said Appalachian reads meters, then bills on the same day. Customers’ billing cycles vary.
Electric utility companies charge by kilowatt hour. A customer who burns a 100-watt bulb for 10 hours consumes 1,000 watt hours of electricity — or 1 kilowatt hour.
The monthly increase for the 1,000-kilowatt-hour customer includes a 12.8 percent interim base rate increase and a 2.7 percent increase tied to a transmission surcharge.
The percentage increases cited by Appalachian reflect comparisons to what this customer has paid in the wake of a fuel factor rate increase that took effect in August.
The percentage calculations and comparisons can be confusing, and customers who consume more or less than 1,000 kilowatt hours each month will see varying degrees of increases in their bills.
Meanwhile, the utility takes a chance whenever it implements an interim base rate.
That’s because the Virginia State Corporation Commission might approve a lesser rate sometime after a final public hearing set for March 16 in Richmond. If that occurs, Appalachian will be on the hook to credit customers’ bills for the difference plus interest. It’s happened before.
Meanwhile, the utility’s request for a 3.6 percent increase in an “environmental and reliability” surcharge is still pending before the SCC.
This summer, the commission approved an increase in the fuel factor rate that customers pay.
State law allows regulated utilities such as Appalachian to recover costs of doing business, plus a profit, from customers. The SCC considers evidence related to expenditures and has some discretion to lower Appalachian’s rate requests.
During hearings last month in Abingdon and Rocky Mount, the SCC’s three commissioners heard impassioned testimony from speaker after speaker in opposition to Appalachian’s base rate increase. Businesspeople and residential customers described struggling to pay current electricity bills, given regional and national economic conditions.
The base rate recovers Appalachian’s costs of owning, operating and maintaining power generation plants, as well as costs associated with the distribution of electricity, related maintenance, depreciation and financing expenses, and return on investment.
The transmission surcharge recovers money Appalachian pays PJM Interconnection, an independent transmission organization that coordinates movement of wholesale electricity in a multi-state region.