Tuesday, February 09, 2010
Bill targets interim electricity base rate
However, the Senate panel killed a measure that would regulate future rate increases.
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.
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RICHMOND -- A key Senate committee endorsed legislation Monday that would lead Appalachian Power Co. to suspend an interim rate charge it imposed in December, and killed a measure that would have put the utility under more rigid regulation and limited its ability to increase rates.
The vote by the Senate Commerce and Labor Committee advanced a compromise agreed to by Appalachian, which has been under fire from customers and state lawmakers over recent dramatic increases in electric bills. The deal will provide some short-term relief to Appalachian customers, as well as enable the company to avoid some of the tougher measures proposed by legislators in the company's service area.
Critics of the compromise legislation (Senate Bill 680) said it won't provide significant relief to homeowners and businesses struggling with bills.
"People are calling me and saying, 'Whatever you do, don't let them get away with it,' " said Sen. Roscoe Reynolds, D-Henry County, who argued for a tougher legislation in Monday's committee meeting.
Under identical House and Senate bills that appear likely to pass this week, Appalachian would suspend a 12.8 percent interim rate base increase it imposed in December. Appalachian had planned to collect the interim increase until the Virginia State Corporation Commission determined whether to approve it or reduce it.
The bills would require the SCC to rule on Appalachian's pending base rate request by July 15 and for new rates to take effect Aug. 1.
The legislation has an emergency clause and would take effect as soon as Gov. Bob McDonnell signs it into law. The reduced rate would apply to the first bills Appalachian renders after the law takes effect, meaning consumers could get a break on electricity consumed during parts of January and February.
"Our people are feeling the stress of high bills," said Sen. Phillip Puckett, D-Russell County, the Senate sponsor of the compromise bill.
A succession of rate increases has caused electric bills for Appalachian customers to increase about 60 percent over the past three years. But Appalachian Vice President Dan Carson reminded the Senate committee that the company's rates went unchanged for a 23-year period beginning in 1983.
Puckett, like Reynolds, had sponsored a bill that would return Appalachian to regulatory rules Virginia had in place until 1999, before the state began a failed experiment with degregulation and later approved new regulatory guidelines that guarantee utilities certain returns. Appalachian officials said measures such as those pushed by Reynolds would prevent the company from being able to recover its costs.
Puckett said he agreed to the compromise "to get this immediate relief and try to carry on some dialogue that hopefully would help us down the road."
"It will help our people some," Puckett said. "Will it keep all those bills down? Probably not. If we continue to have cold weather in Southwest [Virginia] like we've been having, we're going to see more and more bills. But I support the legislation. I hope that we can continue the dialogue [with Appalachian] in the future; that we can reach some compromise later on.
"If we continue to have bills like we've been having, a lot of our businesses are going to go out of business," he said. "A lot of our people are not going to be able to pay their bills."
