By Charles Boothe
January 6, 2023 - As American Electric Power (AEP) customers in West Virginia await a decision from the state Public Service Commission (PSC) on a proposed rate increase, Virginia customers are already seeing their bills rise after a rate hike went into effect Nov. 1, 2022.
According to AEP/Appalachian Power, the Virginia hike (based on the increase in natural gas and coal costs) will cause customers to pay about $20 more a month for every 1,000 kilowatt hours used.
A crew with Appalachian Power works to repair a broken power pole
File photo by Eric DiNovo
But some customers are already complaining that their bills have risen far more than that.
A reader in Roanoke, David Lester, said the increases are “outrageous,” far more than a “slight increase.”
Lester said his December 2021 bill was $200 and the December 2022 bill was $309.
Although the Appalachian Power increase was reported to be based on the increasing cost of natural gas and coal, that “fuel factor” alone went up from $37.58 in December 2021 to $86.08 last month, with the cost of a kilowatt hour almost doubling (.023 to .043).
On Lester’s bill, increases were also seen in generation services (about $30 more), transmission services ($17 increase) and distribution services ($14 hike). Lester’s December 2022 bill was received before the pre-Christmas frigid weather so that was not included.
“We recognize these are challenging financial times for many people and families,” Chris Beam, Appalachian Power president and chief operating officer, said in a statement issued after the rate hike. “We strive each day to keep fuel costs as low as possible, continuously monitoring energy markets for opportunities to purchase fuel and energy at prices that are advantageous to customers.”
In West Virginia, AEP also last year filed for a rate hike based on the cost of the fuel factor, which, they said, would add an average of about $18 a month to bills based on 1,000 kilowatt hours.
But the PSC is still considering the request.
Phil Moye, AEP spokesman in West Virginia, said any new rates will not go into effect until the PSC hands down a decision and those rates would not be retroactive.
The cost of fuel to generate electricity has increased everywhere during the past year, he said, and AEP wants rates to account for those increases.
Customers are often surprised when they see higher bills, he added, but usage is a big part of that.
“People who heat with electricity in winter will mostly use more than 1,000 kilowatt hours,” he said, with space or wall heaters and heat pumps.
“It takes a large amount of energy for the electricity to keep a home stable (with a comfortable temperature),” he said, and the cost of fuel to generate the needed electricity has been rising substantially.
Moye also said the other costs with transmission, generation and distribution are also rising as lines have to be maintained and replaced as well as upgraded.
“They are part of the cost to provide electricity,” he said. “The costs reflect the work they are doing on our transmission infrastructure to keep it modern.”
Moye said some lines from the 1920s and 1030s are still standing.
A “winter rate” is provided by AEP to help with the cost of electricity for people who heat in West Virginia with electricity, he added, reducing the rate for any use over 1,350 kilowatt hours a month.
High usage items, besides the heat pump and space heaters, include the air conditioner, hot water heater, electric stove and dryer, he said.
Moye said that it’s also a good idea to replace old appliances with newer ones that are more energy efficient.
A cold spell like the one before Christmas can dramatically increase usage, he added.
According to AEP, besides the rising fuel costs, the company’s network of 260,000 miles of distribution and transmission lines presents the challenge of ongoing maintenance and operational needs.
“While our transmission and distribution systems are built to last, equipment naturally wears over time, which can increase the risk of failure, outages and efficiency loss. We continue to invest in maintenance and equipment upgrades to meet customers’ expectations for reliability and to provide them with an optimal experience.”
“From 2022 through 2026, AEP plans to invest $38 billion in capital with an emphasis on transmission, distribution and regulated renewable energy. Approximately $24.8 billion of capital, or 65 percent, will be allocated to transmission and distribution operations to construct a more efficient grid and deliver custom energy solutions to customers. Our flexible capital investment pipeline provides us with the ability to quickly redeploy transmission and distribution investments where needed while mitigating customer bill impacts.”
Plans to help customers with high bills are offered by AEP and include an Average Monthly Payment Plan and payment plan to pay off bills if a customer gets behind.