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Appalachian Power files rate case with new programs for Tennessee customers

November 18, 2021

KINGSPORT, Tenn., Nov. 18, 2021 – Kingsport Power, doing business in Tennessee as AEP Appalachian Power, this week filed an application with the Tennessee Public Utility Commission (TPUC) that would raise residential customer rates by approximately 6.8 percent and provide customers with new options and benefits.    

The proposal includes three optional programs for residential customers. One of the options will save money for customers who shift their electric usage away from the peak time for winter heating and summer cooling. A second program saves money for customers who charge their electric vehicles during off-peak times. A third option would allow residential customers to support renewable energy. For a fee, customers can subscribe to certificates that show renewable energy was generated and delivered to the grid on their behalf.

The company’s application also seeks approval of an economic development incentive. Under the program qualifying commercial and industrial customers that establish or substantially expand their operations, would receive a 40 percent reduction on the additional electric load generated by the expansion for a period of five years.

“Our filing represents a cost-effective approach that addresses the needs of our customers and supports local economic development efforts,” said Chris Beam, Appalachian Power president and chief operating officer. “We are a partner with our communities, and our economic development program is another tool to support ongoing efforts to create new jobs and tax revenue that help our areas thrive.”

The rates AEP Appalachian Power customers currently pay for electricity were set in 2016. Based on the filing, the increase would raise the average monthly bill for a typical residential customer using 1,000 kilowatt-hours of electricity by $7.00, effective July 2022. Even with the proposed increase, the company’s rates remain among the lowest in the United States.

AEP Appalachian Power serves approximately 50,000 customers in eastern Tennessee.

Appalachian Power has 1 million customers in Virginia, West Virginia and Tennessee (as AEP Appalachian Power). It is part of American Electric Power, which is focused on building a smarter energy infrastructure and delivering new technologies and custom energy solutions. AEP’s approximately 16,800 employees operate and maintain the nation’s largest electricity transmission system and more than 223,000 miles of distribution lines to efficiently deliver safe, reliable power to nearly 5.5 million customers in 11 states. AEP is also one of the nation’s largest electricity producers with approximately 30,000 megawatts of diverse generating capacity, including 5,500 megawatts of renewable energy.

This report made by American Electric Power and its Registrant Subsidiaries contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although AEP and each of its Registrant Subsidiaries believe that their expectations are based on reasonable assumptions, any such statements may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are: changes in economic conditions, electric market demand and demographic patterns in AEP service territories; inflationary or deflationary interest rate trends; volatility in the financial markets, particularly developments affecting the availability or cost of capital to finance new capital projects and refinance existing debt; the availability and cost of funds to finance working capital and capital needs, particularly during periods when the time lag between incurring costs and recovery is long and the costs are material; decreased demand for electricity; weather conditions, including storms and drought conditions, and AEP’s ability to recover significant storm restoration costs; the cost of fuel and its transportation, the creditworthiness and performance of fuel suppliers and transporters and the cost of storing and disposing of used fuel, including coal ash and spent nuclear fuel; the availability of fuel and necessary generating capacity and the performance of AEP’s generating plants; AEP’s ability to recover fuel and other energy costs through regulated or competitive electric rates; AEP’s ability to build or acquire renewable generation, transmission lines and facilities (including the ability to obtain any necessary regulatory approvals and permits) when needed at acceptable prices and terms and to recover those costs; new legislation, litigation and government regulation, including oversight of nuclear generation, energy commodity trading and new or heightened requirements for reduced emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter and other substances that could impact the continued operation, cost recovery, and/or profitability of AEP’s generation plants and related assets; evolving public perception of the risks associated with fuels used before, during and after the generation of electricity, including nuclear fuel; timing and resolution of pending and future rate cases, negotiations and other regulatory decisions, including rate or other recovery of new investments in generation, distribution and transmission service and environmental compliance; resolution of litigation; AEP’s ability to constrain operation and maintenance costs; prices and demand for power generated and sold at wholesale; changes in technology, particularly with respect to energy storage and new, developing, alternative or distributed sources of generation; AEP’s ability to recover through rates any remaining unrecovered investment in generation units that may be retired before the end of their previously projected useful lives; volatility and changes in markets for coal, and other energy-related commodities, particularly changes in the price of natural gas; changes in utility regulation and the allocation of costs within regional transmission organizations, including ERCOT, PJM and SPP; changes in the creditworthiness of the counterparties with whom AEP has contractual arrangements, including participants in the energy trading market; actions of rating agencies, including changes in the ratings of AEP debt; the impact of volatility in the capital markets on the value of the investments held by AEP’s pension, OPEB, captive insurance entity and nuclear decommissioning trust and the impact of such volatility on future funding requirements; accounting pronouncements periodically issued by accounting standard-setting bodies; and other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes, naturally occurring and human-caused fires, cyber security threats and other catastrophic events.

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