The state delegation stands firm against Appalachian Power’s (also referred to as AEP) proposed rate hike after several previous rate increases were approved.
Dels. Wren Williams and Eric Phillips were among those signing an April 2 letter to State Corporation Commission (SCC) Commissioner Jehmal T. Hudson, to express opposition to AEP’s recently filed request to increase revenues by $95 million, or 5.1 percent.
“As the regulating entity responsible for approving electric rate increase in the Commonwealth, we write to express great concern on behalf of our constituents who have been hit with significant rate increases – and now face the prospect of another if this case is approved later this year,” the letter states.
The letter, which was headed by Del. Terry G. Kilgore, R-Gate City, compared other utilities both in and outside of Virginia, and concluded that AEP customers already pay higher rates for electricity.
“Between July 1, 2007 and July 1, 2023, the average customer’s bill increased more than 136 percent. As a result, too many of our constituents have to make difficult choices between food, medicine, and heating or cooling their homes,” the letter stated. “While we recognize that certain unique conditions exist throughout Appalachian Power’s service territory and the cost of doing business continues to rise, we implore the SCC to consider the totality of the impact of recent and proposed increases on ratepayers.”
Williams, R-Stuart, said the letter is intended to advocate for constituents – AEP rate payers.
“We have seen rate increase after rate increase after rate increase, and it’s very frustrating because the majority of it is added costs based on regulations and other things passed in the General Assembly over the last couple of years,” he said.
Phillips, R-Martinsville, said he signed the letter because he believes energy costs are the number one constituent issue that every delegate is hearing about.
“Just the seemingly ever-increasing rise in the cost of electricity. In 16 years, I don’t know of anything that’s went up 140 percent besides power,” he said.
At some point, Phillips said the rising electricity costs are pricing people out of being able to have “what’s become a modern basic necessity.”
He added electricity is used for not only heating and cooling homes, but “it’s how people cook, it’s how they keep their food refrigerated. It’s something that we all need and have to have” Phillips said. “We’ve really got to start looking at ways to rein in that cost.”
Williams said AEP had two rate increases last year, with one in December. To help alleviate the proposed increases, he introduced a bill that would have frozen the rates for a year and a half instead of having them hit in December when ratepayers “feel it really hard between Thanksgiving and Christmas when everybody’s in the red on their credit cards” and dealing with “the cold winter.”
His proposal would have staved off the increase until spring.
“It would have gone around the calendar,” Williams said. “We would have skipped great changes in December, and then any rate changes would have started on March 1 of every year. Instead of December 1.”
By then, the weather is “pretty nice. It might be warmer during the day, cooler in the evening,” Williams said, and that may help cushion the blow.
Williams’ proposed bill did not pass the General Assembly.
“Apparently Democrats from Northern Virginia who have zero Appalachian Power ratepayers in their district decided that it might be better if that waited another year,” he said, and added that he believes AEP is trying to recoup some of the funds spent on solar projects from ratepayers.
“They’re trying to frontload money for projects that they are required by law to do by taking additional fees from ratepayers prematurely,” he said, adding electric power companies have effectively been accused of doing this.
“What we did was basically say like, ‘you can’t keep doing this because it’s absolutely unaffordable for our constituents.’ You’re not going to fund all of your projects on the backs of our ratepayers here in Southwest Virginia,” he said.
AEP, which is headquartered in Columbus, OH, seems to be more concerned with that state and some of its more lucrative rate areas, Williams said. That means “we just sort of get the short end of the stick all of the time.”
Phillips said there are also other factors in play that aren’t AEP’s fault as to why they keep increasing prices.
“Like the Virginia Clean Economy Act (VCEA) that our friends on the left passed that requires zero percent carbon emissions for both AEP in 2045 and Dominion (Energy) in 2050,” he said.
Phillips said AEP must have its total emissions cut by 80 percent by 2030.
“That’s a very aggressive schedule. That’s six years from now,” he said.
Phillips said the company can’t implement all these new technologies for free and there’s a cost to having solar farms and wind farms.
“You can go to AEP’s own website, and it says they’re going to invest $9.8 billion in renewable energy by 2028. They don’t have a choice but to do it because the state has mandated that they become carbon free, in other words, no greenhouse gases at all,” he said.
Phillips believes that is an impossible task and will not happen by the allotted deadline.
“Just the scale of what they’re being asked to do is just too large. It’s too expensive on the rate payers, but the money’s got to come from somewhere. When the state mandates, this is what you have to do, and you are a highly regulated industry, they don’t have a choice but to do it unless the state wants to fund it though taxes, and or they have to fund it through rates,” he said.
Phillips added it’s already being funded through taxes and rates. On the other hand, he said because of everything required by the VCEA, AEP probably does need to raise its rates.
“In other words, they’re kind of in a rock and a hard place. They’re not completely innocent in this, they’ve been raising their rates for a longtime, but the Clean Economy Act basically calls out two companies: AEP and Dominion because they’re the two largest in Virginia and puts them under all these regulations that they have to meet by certain dates or they’ll be out of compliance with the law,” Phillips said.
Williams said he and the other delegates who signed the letter are currently arguing with the State Corporation Commission, which sets the power rates.
“Appalachian Power actually has to prove why those rates need to be increased. Technically all of the delegates in this area with all of these ratepayers, we just weighed in with the SCC to try to push the SCC to make sure they don’t just unilaterally increase the rate,” he said.
Williams compared it to a real estate tax increase.
For instance, “it’s up to 4 percent or whatever, and people think we’re going to raise it to 4 percent. They’re asking for a certain amount, but that doesn’t mean they’ll get it or get that much,” he said.
Williams said delegates are pushing to make sure AEP either doesn’t get the rate increase or gets the least amount possible “because it’s getting absurd with the cost of electricity.”
He said there have been “astronomical bills of around $2,000” in Franklin County for a single building. “We can’t get any discount or disparity or anything like that. We tried because we’re regionally so much poorer than Kentucky and Ohio. There’s only so much money and there’s only so much funding, and we’re just getting squeezed. It’s just frustrating,” Williams said.
At this juncture as Republicans are in the minority in the legislature, Phillips said unless “we get our friends on the other side to agree with us” there’s very little that can be done “other than make our voices heard, try to represent our constituents in the best way that we can with things like this letter.
“A lot of people think it’s just a symbolic thing,” Phillips said. “Well, we’ve got to do something, and this is one of the things we can do.”
