SCC Approves in Part and Denies in Part New Appalachian Power Rate Rider to Recover Environmental Costs Associated with West Virginia Power Plants

Utilities

AUG 23, 2021

RICHMOND – The Virginia State Corporation Commission (SCC) has approved in part and denied in part an environmental rate adjustment clause (E-RAC or rider). The rider recovers environmental compliance expenses associated with federal rules regulating the disposal of coal ash at two of the company’s power plants located in West Virginia.

These power plants, the Amos and Mountaineer plants, are coal-fired generation facilities that produce electricity to serve Appalachian Power’s Virginia customers. The SCC reviews and approves the share of those environmental compliance expenses that Virginia customers pay through electric rates.

The SCC approved a $27.44 million Virginia revenue requirement for the first year of the rider. The rider will be adjusted annually to reflect actual and projected expenses associated with compliance costs. The rider will increase the monthly bill of a typical Appalachian Power residential customer by $2.17 starting October 1.

The SCC denied approximately $4.2 million of expenses associated with Appalachian Power's proposed investment in the Amos and Mountaineer power plants to comply with the Environmental Protection Agency's Steam Electric Effluent Limitations Guidelines ("ELG"). The Commission found that Appalachian Power did not meet its burden of proving the reasonableness and prudence of these costs at this time.

In its final order, the Commission said, “We find it is critically important to analyze the overall impact of this investment on both customer rates and reliability, and that [for this specific expense] the instant record is currently lacking in both regards.”

The Commission reiterated in its order its sensitivity to the effects of these rate increases particularly considering the economic impacts associated with COVID-19. The Commission, however, said it must follow the laws applicable to any rate case as well as the findings of fact supported by the evidence.

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Contact: Ken Schrad, 804-371-9858

Case Number PUR-2020-00258
Order Granting Rate Adjustment Clause