Rates: Appalachian Power's electric bills include various rate and surcharge components. The two largest are base rates, which include most operating costs other than fuel, and the fuel rate.

Base rate: Includes recovery of Appalachian's costs of owning, operating and maintaining power generation plants, as well as costs associated with the distribution of electricity, related maintenance, depreciation and financing expenses and return on investment.

Fuel rate: Dollar for dollar recovery of all prudently incurred costs for fuel used to generate electricity for Virginia customers. It also includes costs for purchasing power from other utilities. Appalachian depends on coal as its fuel for about 98 percent of the power it generates.

Environmental and Reliability (E&R) surcharge: Virginia law allows Appalachian to recover money spent to comply with environmental regulations and costs associated with providing a reliable source and delivery of electricity. The company anticipates environmental compliance costs will continue to rise. After 2010, the E&R surcharge as currently defined will be discontinued. But Appalachian will still have opportunities to recover costs not associated with the base rate through filings for other surcharges.

Transmission surcharge: Recovers costs of transmission services provided to Appalachian by PJM Interconnection, an independent transmission organization that coordinates the movement of wholesale electricity in a multi-state region.

Source: State Corporation Commission, Appalachian Power