APPALACHIAN POWER SEEKS INCREASE TO COVER INCREASING FUEL COSTS
ROANOKE, Va., April 24,
2012 – Appalachian Power, a subsidiary of American Electric Power (NYSE: AEP),
today filed a request with the Virginia State Corporation Commission (SCC)
seeking to increase the fuel factor component of rates to reflect higher fuel
The fuel factor is aimed at
dollar-for-dollar recovery for the cost Appalachian Power incurs for fuel,
primarily coal, and purchased power, including some wind generation purchases.
There is no profit in the fuel factor. The request addresses a growing imbalance
between what Appalachian Power pays for fuel and what it is collecting from
Appalachian’s proposal would
increase overall rates about 9 percent. Residential rates would increase about 7
percent from 10.5 cents per kilowatthour (kWh) to 11.26 cents per kWh. Certain
higher-usage industrial customers could see larger percentage increases
depending on their usage. Appalachian anticipates no further rate changes in
Although the fuel factor is
often adjusted annually, Appalachian’s last increase in the fuel factor was in
2009. In 2010 it was adjusted downward, and it was left unchanged in 2011. The
decrease has been in effect for more than 20 months.
In this request Appalachian Power asked to increase the fuel factor
from 2.197 cents per kWh to 2.953 cents per kWh, a level comparable to the one
in effect about three years ago.
proposes to collect a portion of the increase over an extended period to help
reduce the impact on rates. The new factor is proposed to take effect in early
June, subject to the review and approval of the SCC. Any over-recovery or
under-recovery will be reflected in the next adjustment.
Appalachian Power has approximately 1 million customers in Virginia,
West Virginia and Tennessee (as AEP Appalachian Power). It is a unit of American
Electric Power, one of the largest electric utilities in the United States,
which delivers electricity to more than 5 million customers in 11 states. AEP
ranks among the nation’s largest generators of electricity, owning nearly 38,000
megawatts of generating capacity in the U.S. AEP also owns the nation’s largest
electricity transmission system, a nearly 39,000-mile network that includes more
765 kilovolt extra-high voltage transmission lines than all other U.S.
transmission systems combined.
Source: AEP Press Release