Shock and Awe

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By Brian Funk, Editor

Despite the frigid weather last Thursday, many Twin County residents got hot under the collar.

That heat was fueled by anger after opening their electric bills.

While the bills should have been no surprise, given the months of debate about American Electric Power's 14.5 percent base rate increase request, seeing those figures in print was still a shock.

The interim rate hike went into effect Dec. 12 — along with a transmission surcharge— even before the State Corporation Commission rules whether it will allow the increase. If the commission ultimately approves a lesser rate adjustment, Appalachian will be required to credit customers' bills for the difference.

Coupled with higher power usage due to the extreme cold of the past few weeks, local residents' December 2009 bills were much higher than usual.

Kathy Jones Burnett of Galax told The Gazette that AEP's 14.5 percent increase was more like 100 percent on her bill.

A quick survey of Gazette staff revealed that bills rose from $50 in November to $130 in December for a small apartment, for example, and $265 to $427 for a 1,500-square-foot, two-bedroom home.

“Let's put it this way — I have a steady creek running by my house and I'm looking into the options of harnessing it for power,” said Patrick Montgomery of Grayson County, after seeing his bill. “That, or I'm quite comfortable going all 1800s once again,” with a fireplace and no electricity.

Darrell Burris of Galax said he just installed new energy-efficient windows and doors at his store, D&J Hobby, in November and the bill still went up.

“I hate it for the AEP workers that have to drive out to see customers tomorrow,” he said. “It could be rough on them — lots of ill people with short tempers and thin wallets.”

“Looks like I'll be eating pinto beans and cornbread this month,” said Alicia Warf of Galax, about her plan to save money.

At a state hearing on the proposed hike last month, Doug Bassett, executive vice president and chief operating officer of Galax-based manufacturer Vaughan-Bassett Furniture, described the rate increase as "obscene" and warned that it would cost jobs at companies that were already struggling in the sluggish economy.

The controversial rate hike is intended to allow AEP to recover the costs of owning, operating and maintaining power generation plants, as well as money spent for the distribution of electricity, related maintenance, depreciation, financing expenses and return on investment.

AEP maintains that it hasn't been making the profit it should in Virginia for several years, due in part to the SCC blocking its rate hike requests and allowing much smaller increases.

AEP earned a profit of $1.4 billion in 2008 — a fact sure to upset those already fuming over last week's bills.

Further fueling customers' ire are media reports that AEP estimated many customers' December 2009 bills because the 14 inches of snow that fell in Southwest Virginia prevented employees from getting to homes to read meters.

“They also admit, reluctantly, that the estimate is on the high side,” wrote blogger and newspaper reporter Doug Thompson of Blue Ridge Muse.com.

The Gazette's calls to AEP on Friday were not returned.

“I heard on the radio that they estimated usage. Can we estimate our payment?” wondered Lauren Spivey Clark of Galax.

Starr Anderson of Grayson County said she understood that AEP's new digital meters meant that the utility “wouldn't be able to use that excuse anymore,” about having to estimate usage.

“If I could afford solar panels right now, I'd totally do it,” Anderson added.

“If you think the bill is too high, call them and complain,” Thompson suggests. “Under the law, they cannot require you to pay the higher bill based on an estimate and AEP cannot charge you a late fee if you refuse to pay the additional amount.

“Tell them in a firm voice that you will pay the same amount as the previous month’s bill and they can make the necessary adjustments when they get around to reading the meter.”

• There's still a chance the rate hike won't be permanent. The SCC won't make a final ruling until March. Written comments on AEP's proposed base rate increase must be submitted by March 3. 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-2009-00030.