State Corporation Commission Rejects Appalachian Power’s Request to Increase Customer Bills

Interesting news, courtesy of Clean Virginia:

BREAKING: State Corporation Commission Rejects Appalachian Power’s Request to Increase Customer Bills

Ruling demonstrates urgent need for legislative reform in advance of Dominion Energy’s 2021 rate case

November 24, 2020

The State Corporation Commission denied Appalachian Power Company’s request for a rate increase, according to the regulatory agency’s final ruling issued today regarding Appalachian’s first triennial rate case. Anti-consumer laws prevented the agency from lowering bills or issuing tens of millions of dollars in customer refunds, both of which the Attorney General’s Office argued were due based on years of overcharging customers.

“Today’s ruling showed what we already knew – Appalachian Power Company grossly overreached by attempting to raise customer bills in the middle of a pandemic and recession after having already raised bills by 64% since 2007,” said Clean Virginia Executive Director Brennan Gilmore. “We commend the State Corporation Commission’s refusal to raise customers’ bills but are disappointed that Virginia’s overwhelmingly pro-utility laws prevented the SCC from issuing refunds for any of the $61 million that the Attorney General’s Office argued Appalachian overcharged its customers. We cannot let this happen again – lawmakers must tackle electricity rate reform and restore the SCC with its full authority before Dominion Energy’s 2021 rate case.”

Key takeaways from the State Corporation Commission’s ruling include: 

• The SCC denied Appalachian’s attempts to raise customer bills based on the utility’s attempt to manipulate the expenses associated with coal-fired power plant retirements.
• Virginia’s legally-mandated profit bonus that allows Dominion and Appalachian to earn above their authorized profit level, a legal provision that does not exist in any other state, prevented the SCC from lowering rates or issuing customer refunds despite consensus from SCC staff and the Attorney General’s Office that Appalachian had overcharged its customers during the three-year review period.  
• The State Corporation Commission still lacks full authority to determine how utilities recover their costs from customers so that the interests of both are treated fairly. As a result, Appalachian customers will continue to pay energy bills that are higher than they should be. 

Dominion Energy’s first triennial rate case begins next March and at least $502.7 million in customer overcharges since 2017 are at stake, according to an SCC report. Without legislative reform during the 2021 General Assembly session, the SCC will be unable to issue customers their full refunds or lower future rates to their appropriate level even if it finds Dominion Energy has overearned.