Appalachian Power Says Tax Cuts Will Prevent Rate Increases

CHARLESTON, W.Va. (WOAY) – Appalachian Power, along with Wheeling Power, today submitted its Expanded Net Energy Cost (ENEC) and Vegetation Management Program (VMP) filings to the Public Service Commission of West Virginia (PSC) and outlined a proposal to use federal tax reform savings to offset unrecovered ENEC and VMP costs.

The filing details $131.7 million in unrecovered costs for which the company would normally request an increase in rates. Under Appalachian’s proposal, savings from the Tax Cuts and Jobs Act of 2017 would be used to offset those costs and rates would not change.

Ultimately, the PSC will decide whether to accept the proposal for passing tax benefits to customers. Without this approach, average residential customer rates could increase by 11.3 percent.

The ENEC reimburses the company for fuel – coal and natural gas – and purchased power on a dollar-for-dollar basis. The VMP reimburses the company for right-of-way trimming and spraying. The unrecovered costs reflect the gap between actual expenses and the revenue collected through customer rates.

Applying federal tax reform savings to offset unrecoveredfuel and vegetation management costs allows us to keep ENEC and VMP rates unchanged, which is a real benefit for customers,” said Appalachian Power President and COO Chris Beam. “Rates in West Virginia have not changed in two years, since July 2016.

Beam said that the company’s proposal offers a method for returning a portion of the federal tax reform benefit to customers.He also said that the company is evaluating other ways to return tax reform benefits to customers, as well as ways for dealing with a loss of Appalachian’s electric load and the need for investment to improve reliability and the rising cost of doing business. He said the company will make future PSC filings to address these matters.

Appalachian Power has 1 million customers in Virginia, West Virginia and Tennessee (as AEP Appalachian Power). It is a unit of American Electric Power, one of the largest electric utilities in the United States, delivering electricity and custom energy solutions to nearly 5.4 million customers in 11 states. AEP owns the nation’s largest electricity transmission system, a more than 40,000-mile network that includes more 765-kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined. AEP also operates 224,000 miles of distribution lines.  AEP ranks among the nation’s largest generators of electricity, owning approximately 26,000 megawatts of generating capacity in the U.S. AEP supplies 3,200 megawatts of renewable energy to customers.

Sponsored Content
Tyler Barker is currently the News Director and Digital Content Manager for WOAY-TV. He was promoted to this job in Mid-November. He still will fill in on weather from time to time. You can follow Tyler on Facebook and Twitter @wxtylerb. Have any news tips or weather questions? Email him at