CHARLESTON, WV (WOAY) – Customers of Appalachian Power, as well as Wheeling Power, will see rate reductions beginning Sept. 1 as the result of the Tax Cuts and Jobs Act of 2017 in a settlement agreement filed today with the Public Service Commission of West Virginia. The PSC must approve the agreement before it will go into effect.
In a major provision of the settlement, the company will credit back to customers $25.5 million over a six-month period from September 2018 through February 2019, a 3.8 percent reduction in customer rates. A residential customer using 1,000-kilowatt hours (kWh) a month will see a $3.56 reduction in their monthly bill; for a customer using 2,000 kWh/month, the reduction would be $7.12.
The PSC Staff, Consumer Advocate Division, WV Energy Users Group and Steel of West Virginia worked with the company to reach the settlement agreement. Kanawha County and the City of Charleston did not sign the agreement but are not opposing it.
“We’re pleased to be able to reach agreement on a method to return tax dollars to customers that reduces rates now and addresses a number of issues that will benefit customers in the long term,” said Appalachian Power President and COO Chris Beam.
In addition to the six-month bill reduction, tax benefits will be used to pay off costs related to 2012 storms and certain power generation projects that would otherwise be paid by customers. This will reduce the company’s previously requested rate increase from $115 million to $98 million. A decision by the PSC, in that case, is expected in the first quarter of 2019.
The settlement lays out how the one-time tax benefit of $235 million as the result of the TCJA will be returned to customers. Other provisions include:
- $18 million will fund a temporary winter rate discount for residential customers who use more than 1,350 kWh/month in December 2018 to February 2019.
- $15 million will be set aside to provide bill payment assistance to low-income residential customers.
- $20 million will be used to reduce subsidies currently paid by commercial and industrial customers.
- As part of another settlement agreement announced last week, $110 million will be used to offset fuel and vegetation management costs, allowing those rates to remain unchanged for the next two years, or until at least June 30, 2020.
- $71 million will be held in reserve to help offset future costs as determined by the Commission in 2019.
- $1 million will be set aside to promote economic development in the state through a program to be developed with the W.Va. Department of Commerce.