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Appalachian Power Co. is seeking what would amount to a 1.5 percent increase in its electricity rates to cover higher generation and environmental costs.
In two filings Friday with the State Corporation Commission, the utility proposed updating rate adjustment clauses that cover certain costs, such as generation and environmental expenses, for a specific time period.
If approved, the rate increase would take effect early next year.
Although Appalachian is actually seeking an increase of about 4 percent, that would be largely offset as existing surcharges expire.
“Beginning in April customers will see a decrease in rates for several months before they return to near current levels in early 2014,” Appalachian President and CEO Charles Patton said in a news release March 29 announcing the filings with the SCC.
Currently, a customer using 1,000 kilowatt hours of electricity pays 11.22 cents per kilowatt hour, excluding taxes.
That rate will fall to 10.98 cents in April, when one of the rate adjustment clauses expires.
If Appalachian’s request is approved, the rate will go back up to 11.39 cents per kilowatt hour early next year.
The last time state regulators approved a rate increase for Appalachian was in July 2012 to account for rising fuel costs.
While that increase was more noticeable to residential customers — amounting to about 7.2 percent on a typical monthly bill — it did not provide a revenue boost for Appalachian.
The so-called fuel factor is a dollar-for-dollar recovery of the amount utilities pay for power generation. The bulk of that cost for Appalachian is for coal to feed its power plants.
Normally, Appalachian would have filed its biennial proposal, which sets its base rate for two years, with the SCC this month.
That process was delayed until next year after the General Assembly passed a law that puts the state’s two largest utilities, Appalachian and Dominion Virginia Power, on alternating years for biennial rate adjustments.
So it will be another year before customers find out whether the costs of a devastating wind storm last June will lead to higher monthly bills.
Appalachian spent $37 million removing toppled trees and repairing the power lines they downed in Virginia, where the utility has about 500,000 customers.
At the time, utility officials said they could not say whether the June 29 derecho would lead to a rate hike until they filed their next biennial proposal, which also would take into account other, yet-to-be determined operational costs.