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Examiner recommends slashing Appalachian Power's rate increase

LARRY O'DELL • Mar 30, 2007 at 12:33 PM

Appalachian requested a 25.4 percent rate increase in May 2006, and it was allowed to take effect temporarily on Oct. 2.

RICHMOND - Appalachian Power Co. should be authorized a 3.9 percent rate increase - a drastic reduction from the 25.4 percent now temporarily in effect, a State Corporation Commission hearing examiner said Thursday.

Alexander F. Skirpan's recommendation would slash the utility's rate increase from $198.5 million to $30.6 million.

Appalachian requested the rate increase in May 2006. Under state law, the increase was allowed to take effect Oct. 2 on an interim basis, subject to refund with interest.

The sharply higher monthly electric bills have prompted thousands of complaints to the SCC. Skirpan said in his report that the SCC received 90 formal electronic or written objections to the company's proposed rate increase and none in support.

Skirpan's recommendation now goes to the three-judge commission for a decision.

"We're certainly disappointed with the recommendation," Appalachian spokesman John Shepelwich said in a telephone interview. "At this point, we don't have a complete understanding of the recommendation by hearing examiner Skirpan, nor do we fully understand the basis for it."

Appalachian and other participants in the rate case have three weeks to comment on the report. The commission can accept, reject or modify the hearing examiner's findings.

"This is only part of the process," Shepelwich said. "We think we presented a good case for our request."

The SCC said earlier this month that it had received more than 26,000 telephone calls, e-mails and letters from western Virginia residents upset about the higher electric bills.

If Skirpan's recommendation is approved, the average residential customer's bill would increase $2.33, or $11.33 less than the interim increase, the SCC said Thursday.

Residential customers weren't the only ones upset with the original rate increase.

"We are pleased that the examiner agreed that Appalachian's $200 million rate increase request was unwarranted," said Edward Petrini, an attorney who represents the Old Dominion Committee for Fair Utility Rates, a group of large industrial Appalachian Power customers.

"This is a significant rate increase for Appalachian Power's customers in general and for our clients in particular."

Appalachian, a subsidiary of American Electric Power, has 1 million customers in Virginia, West Virginia and Tennessee. The company has a 12 percent rate increase request pending in West Virginia.

--- On the Net: SCC: http://www.scc.virginia.gov Appalachian Power: http://www.appalachianpower.com AP-ES-03-29-07 1756EDT

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