RICHMOND — The State Corporation Commission (SCC) is allowing Appalachian Power Company to adjust its capped electric rates to recover $48.9 million of environmental and reliability costs. The amount is approximately $10.6 million less than the company’s original request.

The money will be recovered through a surcharge appearing on monthly bills beginning January 1, 2008 and ending December 31, 2008. The projected impact on the monthly bill is approximately three percent. The surcharge replaces one that appeared on bills until November 30, 2007.

Virginia’s Electric Utility Restructuring Act permits a company such as Appalachian Power to recover costs for compliance with state and federal environmental laws and regulations and for transmission and distribution system reliability. The recovery of actual costs being allowed by the Commission covers a period from October 1, 2005 through September 30, 2006.

The surcharge will be calculated by the company and filed with the SCC’s Division of Energy Regulation prior to January 1. Any future surcharges sought by the company will include a true up mechanism to ensure there is not an over- or under-recovery as a result of the surcharge approved in this case.

Appalachian Power has two other rate cases pending before the Commission. One is a fuel rate adjustment that is already in effect on an interim basis. The other involves the company’s request to recover, through another surcharge, the financing and start up costs for the planned construction of a 629-megawatt clean-coal power plant in Mason County, West Virginia.

Appalachian Power provides electric service to approximately 500,000 customers in all or portions of 31 counties in southwestern Virginia.

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Case Number PUE-2007-00069