CHARLESTON, W.Va., – Appalachian Power, along with Wheeling Power, today filed a settlement agreement seeking the Public Service Commission of West Virginia’s approval in its Expanded Net Energy Cost (ENEC) and Vegetation Management Program (VMP) cases. With the agreement, rates for customers would stay essentially the same.
If the agreement is approved by the Commission, dollars from the Tax Cuts and Jobs Act of 2017 would be used to offset $110 million in fuel and vegetation management costs, allowing those rates to remain stable for the next two years. As part of the agreement, the ENEC and vegetation management portion of rates will not change until at least June 30, 2020.
The PSC Staff, Consumer Advocate Division, WV Energy Users Group and Steel of West Virginia worked together on terms of the agreement and signed off on it as a fair and just settlement that would minimize the impact on customers.
“The parties to this case worked very hard to reach a solution that would benefit customers and still allow the company to recover its costs,” said Appalachian Power President and COO Chris Beam. “Rates in West Virginia have not changed since July 2016 and we appreciate the effort on behalf of customers, in this case, to continue to keep rates stable.”
The ENEC reimburses the company for fuel – coal and natural gas – and purchased power and includes no profit for the company. The VMP reimburses the company for right-of-way trimming and treating. The unrecovered costs reflect the gap between actual expenses and the revenue collected through customer rates. Both are normally adjusted up or down annually.
Without the settlement agreement, rates for residential customers could have risen as much as 11 percent. Upon approval by the PSC, rates shift very slightly between rate classes to more accurately allocate costs, and will go into effect Sept. 1.
In a separate case, the PSC is considering how all regulated utilities in West Virginia should deal with federal tax reform. It is expected to rule in that case later this year.