ROANOKE, Va. – A plan by Appalachian Power to promote job growth and investment in southwest Virginia is included in a new transmission rate adjustment clause petition filed with the Virginia State Corporation Commission (SCC).
The company is seeking SCC approval to construct several miles of high voltage power line and a new substation at Wildwood Commerce Park in Carroll County, a 270-acre regional industrial park. Electrical infrastructure with the capacity for future load growth provides localities with a significant advantage in attracting and retaining large industry and jobs. If approved, Appalachian Power intends to begin construction on the 138-kilovolt transmission line extension and substation this year with completion of the project expected late next year.
“Many industrial prospects today won’t consider a site without utility infrastructure in place,” said Aaron Walker, Appalachian Power president and chief operating officer. “Prospects want shovel-ready sites. Providing an upfront, dedicated energy source would be a game changer and opportunity to positively impact this area for generations through job creation and tax base.”
In Virginia, a public utility is allowed to recover the costs associated with infrastructure development into and within industrial sites identified by the Virginia Economic Development Partnership under a pilot program approved by the Virginia General Assembly. Last year, the SCC approved Appalachian Power’s request to recover the cost of utility infrastructure investments in the Commonwealth Crossing Business Centre and Southern Virginia Megasite at Berry Hill. Wildwood Commerce Park is the company’s third site submitted to the SCC for approval under the legislation.
Appalachian Power’s petition filed Thursday seeks to recover its business park investments. This is just one, small aspect of the application. The filing also seeks to cover an increase in transmission charges, as administered by PJM. PJM is the independent regional transmission organization that manages the electric grid in 13 states, including Virginia.
Appalachian Power requested to increase the authorized Transmission Rate Adjustment Clause (T-RAC) from $368.1 million to $413.2 million, a $45.1 million increase. The T-RAC is the portion of a customer’s bill that recovers costs for transmission services, fees and new construction.
If approved by the Commission, the change will increase the monthly bill for a residential customer using 1,000 kilowatt-hours by $4.15, or roughly 2.6 percent, from the March 2023 typical bill. A decision by the SCC is required in three months and any rate change implemented within 60 days of the final order.
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 17,000 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 5.6 million regulated 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 more than 6,900 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; the impact of pandemics, including COVID-19, and any associated disruption of AEP’s business operations due to impacts on economic or market conditions, electricity usage, employees, customers, service providers, vendors and suppliers; 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 generation capacity and the performance of AEP’s generation 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 coal ash and 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 standards periodically issued by accounting standard-setting bodies; 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; and the ability to attract and retain the requisite work force and key personnel.