KINGSPORT, Tenn. – A rise in the cost of fuel and purchased power will increase the rate Kingsport area customers pay for electricity beginning this month. AEP Appalachian Power, a utility subsidiary of American Electric Power (Nasdaq: AEP), recently notified the Tennessee Public Utility Commission (TPUC) of the pending increase, which it attributed to a rise in the cost of coal, natural gas and purchased power.
Fuel costs are recovered through a Fuel and Purchased Power Adjustment Rider (FPPAR). Adjusted each year, the FPPAR permits the company to recover the cost of purchasing natural gas and coal for its power plants, as well as the cost of purchased power. AEP Appalachian Power does not earn a profit from fuel.
The company continuously monitors energy markets for opportunities to purchase fuel and energy at prices that are advantageous to customers. Energy market prices began to soar in 2021 due to the resurgence of the economy following the COVID-19 pandemic, inflation, and the ongoing war in Ukraine.
The new rate went into effect on November 1 and will affect residential, commercial, and industrial customers. For a typical residential customer using 1,000 kilowatt hours in a month, this will result in an approximate $34 monthly increase in their bill.
“Ensuring customer costs are as low as possible is a daily priority for us,” said Aaron Walker, Appalachian Power president and chief operating officer. “We recognize these are difficult times for many people and families, and we want customers to reach out to us early on if they are struggling to pay their bill.”
Appalachian Power offers payment options including the Average Monthly Payment Plan (AMP), which helps customers avoid seasonal spikes in their monthly bills by spreading costs throughout the year.
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 16,700 employees operate and maintain the nation’s largest electricity transmission system and more than 224,000 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 31,000 megawatts of diverse generating capacity, including 7,100 megawatts of renewable energy.