Wednesday, February 10, 2010
House votes to suspend utility rate
A measure calls for Appalachian Power Co. to halt its 12.8 percent interim rate increase.
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RICHMOND -- The House of Delegates passed emergency legislation Tuesday that would suspend an interim rate increase imposed by Appalachian Power Co., and provide Southwest Virginia homeowners and businesses with some short-term relief from skyrocketing electric bills.
But a House subcommittee also kept alive a bill that would return Appalachian to an old state regulatory scheme and affect its ability to seek future rate increases. An Appalachian official said that bill could undercut a compromise that led to the emergency legislation. The full House Commerce and Labor Committee likely will act on the bill Thursday.
"To the extent that you take away one of the things the solution addressed, you don't have the full effect," Appalachian Vice President Dan Carson said after Tuesday night's 7-2 subcommittee vote.
The House swiftly passed a bill (House Bill 1308) that calls for Appalachian to suspend a 12.8 percent interim rate increase it began assessing in December. The company had planned to collect the additional charge until the Virginia State Corporation Commission decides whether to approve or reduce the rate request.
Under terms of a compromise bill negotiated with Appalachian, the SCC would rule on the company's base rate request by July 15 and new rates would take effect Aug. 1. The House passed the bill by a vote of 98-0.
Before passing the bill, the House amended it to ensure that the interim rate increase "shall" be suspended. An earlier version said the increase "may" be suspended.
The measure now heads to the Senate, which is considering a nearly identical measure (Senate Bill 680). The rate reduction would take effect as soon as Gov. Bob McDonnell signs the legislation into law.
Appalachian agreed to the legislation with the idea that other bills targeting the company would be put to rest. But a House Commerce and Labor subcommittee voted Tuesday night to advance a bill (HB 639) by House Minority Leader Ward Armstrong, D-Henry County, designed to return the company to the cost-of-service regulatory model that existed before Virginia began a failed effort to deregulate utilities in 1999. The state adopted a new hybrid regulatory scheme in 2007.
Armstrong said his district, which has some of the state's highest unemployment rates, has been hit hard by a succession of utility rate increases. Carson noted that the only rate increase sought under the 2007 law is the company's current base rate request. Some subcommittee members questioned whether Armstrong's bill would lead to decreased rates.
"Pass this bill and make me a liar," Armstrong said during an extensive hearing on his bill. "I can tell you one other thing, nothing else out there is working to cut these rates."
Carson said Armstrong's bill would be "very detrimental" to Appalachian and the company would have "more difficulty recovering its costs on a timely basis."
