Friday, February 05, 2010
Measure on utility rates clears hurdle
A bill that would suspend a recent rate increase by Appalachian Power heads to the House floor next week.
General Assembly 2011
Among the major issues: The state's continuing efforts to provide services with fewer dollars and Gov. McDonnell's plan to privatize liquor stores. Session ends Feb. 26.
The latest
Follow the Blue Ridge Caucus blog and @BlueRidgeCaucus on Twitter.
- Gilbert expresses regret for abortion remarks
- Senate rebuffs McDonnell, rejects teacher contract change
From today's paper
- Va. House passes abortion-related bills
- Newspaper ad bills OK'd by House, head to Senate
- Follow state and local political coverage from The Roanoke Times
Watch live video
Who's your legislator?
More resources
RICHMOND -- Legislation that would lead Appalachian Power Co. to suspend an interim rate charge it began collecting in December cleared its first hurdle Thursday and appears to be on a fast track to passage in the General Assembly.
But the debate over soaring power bills may be far from over.
The House Commerce and Labor Committee swiftly approved a bill establishing a timeline for state regulators to rule on Appalachian's pending rate increase request. The full House likely will vote on the bill (House Bill 1308) next week while the Senate takes up an identical measure (Senate Bill 680).
If the legislation passes and Gov. Bob McDonnell signs it, Appalachian would immediately suspend the 12.8 percent interim rate increase imposed in December. The legislation would require the Virginia State Corporation Commission to rule on Appalachian's base rate request by July 15 and for new rates to take effect Aug. 1.
Appalachian estimated the typical residential customer who uses 1,000 kilowatt hours a month would see a decrease in the monthly bill from $117.86 to $105.81 while the suspension is in effect. The decrease will be applied to the first bills issued after the legislation is signed, meaning consumers could get a reduced rate on electricity consumed during parts of January and February if the legislation moves quickly.
The legislation represents a compromise by Appalachian, which has been under fire from customers and state legislators complaining about skyrocketing electric bills. Appalachian's interim rate increase took effect at the same time severe winter weather set in, producing staggering increases in electric bills.
Appalachian had planned to collect the interim increase until the SCC decided to either approve the increase as requested or reduce it. The SCC will begin an evidentiary hearing on the rate request March 30.
Appalachian Vice President Dan Carson used the example of a Bluefield resident and relative of a company employee to demonstrate the impact to the House committee. The customer, who lives in an older home with below average insulation, would have an average monthly bill of $227.37 under current rates. The customer's power consumption soared in January, producing a bill of $576.63. If interim rates are suspended, the customer's bill would drop to $510.43.
While suspending the interim rate increase will provide some relief to customers, some Southwest Virginia lawmakers said the compromise legislation alone is not enough. House Minority Leader Ward Armstrong, D-Henry County, said Thursday that he still wants votes on two of his bills, including one that would return Appalachian to the cost-of-service regulatory model used before Virginia began deregulating electric utilities in 1999.
"We can pass it," Armstrong said. "We don't need AEP's permission."
Mary Martin, a utility watchdog in Southside Virginia, was outraged that lawmakers would abandon legislative efforts to rein in rate increases.
"I want to know who Appalachian got that agreement with," Martin said. "I want names. Washington, D.C., politics have hit Virginia, with deals cut in backrooms." But Appalachian officials and some lawmakers said the compromise bill would unravel if the General Assembly advances other bills aimed at punishing the power company. Company spokesman Todd Burns said Appalachian won't be able to collect its full cost for providing service during the suspension period and imposing tougher regulations after that period "would only make things worse."
Del. Terry Kilgore, R-Scott County, the chairman of the Commerce and Labor Committee, said the compromise should be given a chance to work. Kilgore noted that the interim rate increase will be suspended as soon as McDonnell signs the bill -- perhaps in the middle of this month -- while other measures would not take effect until July 1.
"The majority of the legislators, we wanted some quick action," said Kilgore, who has been bombarded with complaints about rising electric bills. "Those other bills can be debated at another time."
Staff writer Duncan Adams contributed to this report.
