CHARLESTON, W.Va. – Appalachian Power, along with Wheeling Power, today submitted its annual Expanded Net Energy Cost (ENEC) filing to the Public Service Commission of West Virginia (PSC), in which it requested a $641.7 million increase to the current ENEC rate.
The ENEC is the mechanism for reimbursing the company for purchased power, and for the cost of coal and natural gas used to fuel power plants. The regularly filed cases present the opportunity to adjust the amount included in rates so that ongoing ENEC expenditures align with ENEC revenues.
As coal and natural gas prices rose dramatically in 2021 and remained high throughout 2022, the company paid far more for fuel and purchased power than the amount included in rates. In the twelve-month ENEC review period that ended February 28, 2023, unrecovered costs grew from $216 million to almost $553 million.
“Recovering these costs over the traditional one-year period would place an enormous burden on our customers,” said Aaron Walker, Appalachian Power president and COO. “To that end, we are proposing two creative cost recovery solutions in this filing that will minimize rate impact.”
The first proposal would spread recovery over three years and raise residential rates by $293.1 million, or 12.1 percent. The second proposal utilizes securitization of the under-recovery and other cost items, and would raise residential rates by 3.5 percent or $88.8 million to align ongoing ENEC costs and revenues. The company requested that any approved adjustment take effect September 1, 2023.
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 powering a cleaner, brighter energy future for its customers and communities. AEP’s approximately 17,000 employees operate and maintain the nation’s largest electricity transmission system and more than 224,000 miles of distribution lines to safely deliver reliable and affordable power to 5.6 million regulated customers in 11 states. AEP also is one of the nation’s largest electricity producers, with approximately 31,000 megawatts of diverse generating capacity, including more than 6,900 megawatts of renewable energy.