Appalachian Power seeks no rate increase for 2027, slight increase for 2028 (copy) (copy) (copy)
Appalachian Power Co. proposed a compromise for rate increases over the next two years, and sought approval from the State Corporation Commission in a hearing this week.
The power company is seeking approval to not raise residential rates for one year, then increase rates by an average of 92 cents per month for a residential customer using 1,000 kilowatt hours (kWh) per month for the year after. The first year of this period will run from March 1, 2027 through Feb. 29, 2028. The second year will start then and finish on Feb. 28, 2029.
If the SCC approves the stipulation, Appalachian Power’s authorized return on equity — meaning the amount the utility company would be allowed to profit — would be 9.8%.
Because Appalachian Power is a regulated monopoly in its service area, it cannot simply increase prices without approval from the State Corporation Commission. The SCC held a hearing to decide whether or not to approve the proposed rate increases. However, the hearing ended Monday, several days earlier than scheduled, since many of the parties involved agreed to a stipulation. The parties submitted the stipulation — which is essentially a settlement agreement — for approval; a verdict is expected by Jan. 15. The SCC must review the stipulation and can approve or deny it in full or in part.
As a regulated utility, Appalachian Power serves much of Southwest Virginia, while Dominion Energy supports most of the rest of the commonwealth. Appalachian Power has 540,000 customers in Virginia, totaling more than 1.1 million in Virginia, West Virginia and Tennessee combined.
On May 28, Appalachian Power submitted a filing requesting approval from the SCC to raise the monthly bill for residential customers by about $9.10 starting next year — or about $109 for the whole year. That would have amounted to an increased total increase in base rates of $61.4 million. At the time, the company said its request was its smallest requested increase in nearly 30 years. Five months later, Appalachian Power substantially lowered its request.
One of the groups that formed the stipulation proposal was the staff of the State Corporation Commission, a group of experts who advise the commissioners. The three commissioners who will decide the case are elected by the General Assembly and are completely separate from the staff members who participated in the stipulation. Greg Weatherford, the SCC’s director of information resources, said the commissioners are “not bound in any way” by recommendations from the staff.
Google, Kroger, Walmart and the Sierra Club were some of the other stipulating participants listed in the proposal, working collectively to seek approval from the SCC.
On Aug. 26, Carolyn Berry, a partner at Bates White Economic Consulting, supplied testimony on behalf of Google in the case. Her testimony — both written and verbal — centered around the impact of new policies on “large load customers,” meaning industrial or commercial facilities that need substantial amounts of electricity, such as data centers.
Google has announced data center projects at the Greenfield business park in Botetourt County and the Wood Haven Technology Park in Roanoke County. Appalachian Power will supply utilities for both of those projects.
The SCC declined to comment, since the case is still active. Representatives for Appalachian Power did not reply to requests for comment as of publication.
Sam Mostow (540) 981-3251
