Appalachian Power requests rate increase to offset inflation and address maintenance needs
Roanoke, Virginia – Appalachian Power, a prominent electricity provider, has submitted a triennial application to the State Corporation Commission to raise the base rate cost of electricity.
This request has been made on account of the increasing cost of labor and equipment, which has made it necessary to pass on some of the burden to customers. APCo has proposed a 16% increase in the base rate, which, if approved, would increase the cost for customers by around $20 per 1,000 kWh used.
The proposed base rate increase of $212 million comes after the SCC approved APCo’s fuel factor rate increase in November, which was also attributed to inflation. Customers could be paying $40 more per 1,000 kWh due to the increased rates. The base rate increase is necessary for APCo to cover the rising cost of labor, equipment, and service maintenance.
APCo spokesperson Teresa Hamilton Hall mentioned that the additional funding would enable the company to address some of the worst-performing circuits and trim or remove problematic trees within their right of way. APCo has made about ten rate change requests in the last two years, with seven rate increase requests and three rate decrease requests. Hamilton Hall noted that the company may file a transmission application later this year, considering the extensive transmission work currently in progress.
When asked if APCo considers the impact of rate increases on a customer’s financial stability, Hamilton Hall responded that they certainly do. However, their primary obligation is to provide safe and reliable power for their customers.
As part of the proposal, the company has suggested a program for low-income customers, where about 7% of them would no longer have to pay the basic service charge for electricity, resulting in savings of about $100 per year. The SCC will now review the application and decide whether to approve, deny, or modify it. If approved, the proposed increase will take effect in January 2024.
