Tuesday, April 24, 2012


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 costs.

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 customers.
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 2012.
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.
Appalachian 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

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