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Appalachian rate hiked
Friday, June 22, 2012
By MICKEY POWELL - Bulletin Staff Writer
Residents and businesses in Henry and Patrick counties will pay more for electricity starting today.
The State Corporation Commission (SCC) on Thursday approved a rate hike that Appalachian Power Co. sought to help pay rising fuel costs.
The new fuel rate of 2.953 cents per kilowatt hour is an increase of 0.756 cents from the fuel factor of 2.197 cents set by the SCC in 2010. The hike translates into a $7.56, or roughly 7.2 percent, increase in monthly power bills for customers using 1,000 kilowatt hours of electricity per month.
Appalachian asked the SCC to allow it to collect part of the rate increase over an extended period to help reduce the impact on rates. The SCC approved that request, finding that “a 24-month period is reasonable,” a release stated.
State law lets utilities charge customers for the cost of fuel, such as coal, used to produce power, as well as the cost of any electricity bought on the wholesale market. Appalachian’s rate hike reflects higher costs for coal and wind power, said Todd Burns, the utility’s corporate communications manager.
“There is no profit built in” to the increase, he emphasized.
SCC spokesman Andy Farmer called it “a dollar-for-dollar recovery” of increased fuel costs.
Appalachian has been granted other rate increases in recent years. Burns said the utility does not foresee requesting another hike this year, but he was unable to determine if such a request might be made in 2013.
Burns said the SCC reviews utilities’ fuel factors annually and often adjusts them. Factors taken into account include fuel expenses from the previous year and expenses anticipated in the coming year, he and Farmer said.
Appalachian’s last fuel factor increase was in 2009. A year later, the SCC lowered the factor at the company’s request. The factor did not change in 2011.
According to their spokesmen, both Appalachian and the SCC realize that many people in Henry and Patrick counties are struggling financially and already are having trouble paying electric bills.
Appalachian is “doing everything we can” to hold down costs and help customers control their power bills, such as offering payment options and teaching customers how to conserve electricity, Burns said.
Farmer said the SCC heard complaints about Appalachian rate hikes during recent public hearings. However, “the company is statutorily entitled to recover its prudently incurred” fuel cost increases, he said.
Appalachian, which serves Henry and Patrick counties, does not provide electricity in Martinsville. City customers buy electricity through the Martinsville Electric Department.