Pointing to the rising cost of doing business, Appalachian Power Co. proposed Wednesday to raise the base rate it charges that would equate to about an 18 percent increase for the average residential customer.

Appalachian filed three requests with the Virginia State Corporation Commission, two that if approved would increase customer rates. In addition to increasing the base rate, Appalachian has asked to add a new component to the bill that would recover transmission costs.

If the two rate increase filings are approved, the average residential customer, using 1,000 kilowatt hours a month, would see a daily increase of about 55 cents over the existing rate. That would take the average residential customer's monthly bill from about $92.97 to $109.89.

In particular, Appalachian's president and chief operating officer, Dana Waldo, said the rising costs in meeting mandated environmental regulations, coupled with the tightening of credit markets, have contributed to the need to raise rates.

"We are doing everything we can to maintain costs, but a lot of what I just told you are totally out of our control," Waldo said during a news conference Wednesday in Roanoke.

The company already has put in place cost-cutting measures, including a wage freeze for the year, reducing its capital improvement budget by $750 million and curtailed hiring and business travel.

But Appalachian also faces significant increases in the cost of running two West Virginia power plants as it comes into compliance with federal clean air regulations to remove sulfur dioxide from its emissions. The impact has added $2.5 billion to the value of its assets, bringing the total assets from $4 billion to $6.5 billion.

Waldo said he believes the biggest misconception in the general public is the cost of meeting federal environmental regulations.

If approved, the base rate increase would generate an additional $169 million and the transmission adjustment would generate about $24 million more. Overall it would give Appalachian about a 16 percent increase over current rates.

Wednesday's rate increase requests are part of a report that utility companies are required by law to file every two years.

While the timing of this request is dictated by law, it comes on the heels of two other unrelated rate increases filed in May, and less than a year after the company was granted a previous base increase of about 17 percent to 19 percent.

The SCC has already held public hearings related to a fuel factor rate increase request and has plans to hold a public hearing in October to gather testimony about a request to increase a surcharge to recover environmental compliance and reliability costs.

If all of the rate increases requested to date are approved by the SCC, the total bill for a residential customer using 1,000 kilowatt hours would be $122.10.

Already, the SCC has heard fierce opposition to both the fuel factor and surcharge increases proposed by Appalachian.

Waldo said that as more and more regulations are mandated, customers will continue to see increases in rates. He urged people to take energy conservation seriously.

"There's a lot of things you can do to conserve electricity," he said. "We're not asking people to go without. We are asking people to use the product wisely."

Specifically, Waldo said switching a load of laundry to a cold water cycle would save 11 cents a day, getting rid of a second, older refrigerator would save 25 cents a day, and fixing a leaking hot water faucet would save 10 cents a day. He also heavily promoted the $96 million allocated to Virginia through the federal stimulus package for weatherization of homes.

In addition to announcing the SCC filings, Waldo said Appalachian would immediately increase its contribution to low-income energy assistance programs in Virginia and West Virginia from $210,000 to just over $1 million. Virginia's Neighbor-to-Neighbor program will get $500,000 instead of $100,000.

"We know this rate increase comes at a difficult time for customers," Waldo said.

Changes to payment programs are being implemented to help those struggling with the monthly bill.

The third filing Wednesday would not increase rates but would allow industrial companies to earn a discount by agreeing to reduce power consumption during periods of high prices and emergencies.

Appalachian also asked for SCC approval of an economic development incentive that would provide a discount for larger commercial and industrial customers who expand their businesses. Companies would be eligible to earn up to a 20 percent discount on the demand side of their electricity bill if they created new jobs by expanding their operations or started a new business entirely.

The SCC will set a schedule for public comment and other procedures related to the filing in the next two or three weeks, said Ken Schrad, an SCC spokesman. Schrad said he couldn't speak to a specific time frame for when rate increases would occur if approved.

But as an example, Dominion Virginia Power filed a similar report May 1 and a hearing for its request won't be held until January, Schrad said.

Staff writer Duncan Adams contributed to this report.