Thursday, January 14, 2010
Editorial: No cheap energy solution
The state's House minority leader wants to help ratepayers who are hurting. That's commendable, but he needs to find a practical way.
From the RoundTable blog
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Ward Armstrong's constituents are desperately seeking relief from repeated Appalachian Power rate increases, and he is desperately seeking a way to give it to them.
The House minority leader and delegate from Henry County says he has heard pleas from so many people at rate hearings and town hall meetings throughout his rural district that he must do something.
If, by something, he means something fair and responsible, likely to pass legal muster and win approval in the General Assembly, we'd like to hear it.
Instead, Democrat Armstrong proposes to take his district -- and any other served by Appalachian Power -- back to kinder, gentler days for consumers. The days before 1999, when state lawmakers tried their hand, unsuccessfully, at electric deregulation.
By 2007, after competition failed to materialize, legislators were forced to back away. Reregulation, though, has been kinder to the industry than to customers under a different framework that allows utilities higher earnings.
If that needs a second look, it should be a look that extends to all electric utilities in the state.
Armstrong proposes to return only Appalachian Power to the old regulatory model to avoid running headlong into Virginia Dominion Power, the Richmond-based energy giant with legendary influence in the state capital.
Appalachian, no less than Dominion, says it must have a rate of return high enough to attract the capital needed to expand generating capacity in order to meet future needs.
Appalachian customers also are being hit by an adjustment in rates held low for years while the company skirted federal air quality standards. Eventually, the utility was forced to install expensive pollution controls.
Customers are paying for recovering those costs, as well as fuel factor adjustments.
All of this has come together at a particularly cruel time.
It's a cold winter. The economy in Armstrong's Southside district has been at least as harsh, not just this season but for years. People's incomes have stagnated or gone down. Their bills for electricity -- a basic necessity -- keep going up.
They need help. Armstrong will have to look harder for a solution.
The good old days of cheap energy? Those days are gone.
