Legislators inch closer to deal with utility

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RICHMOND -- Appalachian Power Co. would suspend an interim rate charge it began collecting in December if the General Assembly passes emergency legislation proposed Wednesday.

The proposal outlined before a state legislative commission represents a compromise by Appalachian after hearing from Southwest Virginia lawmakers who have been besieged with constituent complaints about skyrocketing electric bills. Several legislators have responded to the complaints by filing bills intended to limit Appalachian's ability to increase rates.

"I hope this conveys an understanding of the circumstances as related to us by our services area legislators, and our appreciation for the difficulties being experienced by our customers following a very cold period," said Appalachian Vice President Dan Carson while explaining the deal to the General Assembly's Commission on Electric Utility Regulation.

But some legislators said the proposal won't do enough to help consumers and businesses reeling from dramatic increases in their power bills.

"I think what's essentially going on here is we're making a backroom deal here at the Capitol to the detriment of those people who are paying these electric bills," said Del. Ward Armstrong, D-Henry County, the minority leader in the House of Delegates.

Under terms of a compromise that some legislators described as unprecedented, Appalachian would suspend its 12.8 percent interim base rate increase as soon as Gov. Bob McDonnell signs legislation passed by the General Assembly. The legislation also sets a timetable for state regulators to act on the company's pending rate increase request.

The legislation would require the Virginia State Corporation Commission to rule on Appalachian's base rate request by July 15 and for new rates to take effect Aug. 1.

Appalachian had planned to collect the interim increase until the SCC decided to either approve the increase as requested or reduce it.

If the SCC approves a lesser increase than Appalachian wants, the company typically would be required to credit customers' bills for the difference plus interest. Under the legislation, however, any required refunds from the December increase would be offset by the amount of revenue the company would have collected if the SCC's approved rate had been in effect during the suspension period. Appalachian estimated the typical residential customer who uses 1,000 kilowatt hours a month would see a decrease in the monthly bill from $117.86 to $105.81 while the suspension is in effect.

The decrease will be applied to the first bills issued after the legislation is signed, meaning consumers could get a reduced rate on electricity consumed during parts of January and February, Carson said.

Both the interim increase and a separate transmission surcharge took effect Dec. 12.

Some key legislators say that Appalachian has made a concerted effort to address concerns raised by customers and lawmakers, and that the proposed compromise should be given a chance to work.

"I want to see what's going to happen long term, but this is more than I thought we could accomplish," said House Majority Leader Morgan Griffith, R-Salem, who hosted a meeting in his office last week in which Southwest Virginia lawmakers voiced their concerns to Dana Waldo, Appalachian's president and chief operating officer.

The House Commerce and Labor Committee will take up the legislation today and the Senate Commerce and Labor Committee will handle the Senate bill on Monday. If the bills pass both houses, they could get to McDonnell's desk by the middle of this month.