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Court says APCo can recover $6M
Friday, November 2, 2012
By FROM BULLETIN AND AP REPORTS -
RICHMOND — The Virginia Supreme Court said Thursday that Appalachian Power Co. can recover $6 million of the $33.3 million it sought to cover environmental costs.
The justices unanimously ruled that the utility is entitled to recover from customers the environmental costs that it did not collect through its base rates. The court said the State Corporation Commission (SCC) used flawed methodology in denying recovery of those costs, which amounted to $6 million.
But the court affirmed the commission’s denial of $27.3 million in environmental costs embedded in the “capacity equalization” charges Appalachian Power paid to its affiliates. Those are charges the utility pays for extra electricity when demand exceeds its own generating capacity.
The commission ruled that evidence of “actual costs” was insufficient, and the justices said they were in no position to overturn that finding.
Todd Burns, corporate communications manager for APCo, said it will be up to the SCC to determine how the utility can recover the $6 million.
“To put it in context, that’s less than 50 cents a month” for an average ratepayer, Burns said Thursday. If it is recovered over two years, that would be less than quarter a month, or if it was over 10 years, it could be pennies a month, he said, adding that there is no way to know now what the SCC will order.
More importantly, Burns said, the ruling gives APCo clarity to the 2007 legislation on which the SCC based its original ruling.
“We will know exactly how the Supreme Court interprets the law, and it will give us guidance for future cases,” Burns told the AP.
In its March 2011 petition to the SCC, the utility sought to recover $77 million that it spent to comply with state or environmental laws or regulations. A hearing examiner slashed that to $63.3 million. The commission further reduced the recovery to $30 million, and Appalachian Power appealed to the Supreme Court.
Attorney General Ken Cuccinelli, who backed the commission’s actions, praised the court’s ruling as a victory for consumers, according to the AP.
“While we certainly would have preferred the court to have upheld all of the SCC’s decision, the fact remains that we prevailed on the majority of what APCo sought to recover in this appeal,” Cuccinelli said in a statement. “With the recovery limited to $6 million as opposed to the full $33.3 million sought, the impact on an individual customer’s monthly electric bill is greatly reduced.”
Appalachian Power serves about 500,000 customers in Virginia, including those in Henry and Patrick counties.