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Hearing set on APCo rate proposal

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RICHMOND — The State Corporation Commission (SCC) will hold a public hearing on July 1 in Wytheville to gather comments about Appalachian Power's request to increase the portion of the electric bill that pays for the fuel used to generate electricity.

The hearing will give members of the public in APCo.'s Southwest Virginia service territory a more convenient location to offer testimony as public witnesses, according to an SCC press release. The Wytheville hearing will be in addition to a hearing on the request already scheduled for June 30 in Richmond.

When APCo. pays more for coal to fire its power plants, the utility's customers typically pay more for electricity. By law, electric utilities are entitled to pass along to customers the costs of electricity-generating fuel and to annually file to adjust the associated "fuel factor."

Appalachian has proposed a billing strategy that would extend the recovery of fuel costs through August 2010 and thus limit the monthly increase in residential electricity bills to about 9.6 percent.

Del. Bill Carrico (R-Grayson) said in a press release last week that the SCC scheduled the July 1 meeting at the request of a 14-member bipartisan coalition of state legislators opposing the APCo. rate hike, of which he is a member.

“I am very pleased to hear the SCC has accepted our invitation to come to Southwest Virginia,” Carrico said. “I believe our citizens are eager to have their voices heard on this issue.”

Also on May 15, the utility filed to recover about $41 million for "environmental and reliability" costs incurred during 2008. It wants to revise a surcharge that would take effect Jan. 1, 2010.

Among other things, the surcharge recovers money spent to reduce emissions and to maintain reliability of electric service. That revision could raise the average residential bill by about 3.5 percent.

Thus, the two filings combined — if the SCC approves and adopts Appalachian's extended plan to recover fuel costs — could increase average monthly residential bills by about 13 percent.

This could push the average monthly electric bill in Western Virginia to more than $100 this year for the first time. The average Appalachian customer who uses 1,000 kilowatt hours of electricity per month and currently pays $92.97, would pay $105.18 by January 2010 if both increases are approved.

The state-regulated utility said it had anticipated paying about $62 a ton for coal and has actually been paying more than $70 a ton. "We are paying more for coal than we are collecting from customers," said Todd Burns, a spokesman for APCo.

The utility's May 15 filings came five months after the SCC approved a controversial 17 percent base rate increase for Appalachian's residential customers. The base rate increase also hit commercial and industrial customers, many trying to cope with a slumping economy.

Irene Leech, a professor of consumer affairs at Virginia Tech and president of the Virginia Citizens Consumer Council, said the increases will hurt many people in the region already struggling to pay their electric bills. But, she acknowledged that Appalachian does not control some of its costs, including fuel expenses and the costs of complying with environmental regulations.

The July 1 hearing is set to begin at 6 p.m. in Snyder Auditorium on the WCC campus, 1000 E. Main St. in Wytheville. Anyone wishing to testify should arrive early and notify the SCC bailiff. Public witnesses are sworn in and are subject to cross-examination.

Carrico reminded Southwest Virginia citizens that they also can submit written comments to the SCC. “Write a letter, send an e-mail, use our Web site — www.AEPaction.org — or use the State Corporation Commission Web site, but do it soon because time is limited.”

TO FILE A COMMENT:

To become part of the official SCC case file, all written comments on APCo.’s proposed fuel factor increase must be submitted by June 23. All correspondence should be sent to the Clerk of the State Corporation Commission, Document Control Center, P.O. Box 2118, Richmond, Va. 23218-2118, and refer to case number PUE-2009-00038.

Interested persons desiring to submit electronic comments directly to the SCC may do so at the SCC’s Web site — www.scc.virginia.gov/case.

Click on the “Public Comments/Notices” link and then click the “Submit Comments” button for case PUE-2009-00038.