A bill aimed at helping control Appalachian Power customers’ rising monthly bills is headed to a House of Delegates committee with a narrower focus than originally proposed.
HB 1075, carried by Del. Sam Rasoul, D-Roanoke, now would ask the State Corporation Commission to examine two factors that contribute to what customers pay each month.
First, the SCC would review whether it’s cheaper for Appalachian Power to buy electricity from a regional wholesale transmission market or to use its own power-generation resources in order to meet an ongoing obligation to ensure that electricity will be available even during the times of highest demand.
Appalachian Power has said that using its own resources provides the best deal for customers, but Rasoul said it historically has been more expensive.
Second, the bill would ask the SCC to examine how to reduce costs associated with severe weather events, thereby potentially reducing the burden on customers to pay those costs.
The bill would direct the SCC to consider these factors during its next biennial review of Appalachian Power’s rates. The utility is expected to make its initial filing in that rate case at the end of May.
“I know a lot of people, especially with this deep freeze, are going to be paying attention and hopefully we just have these transparency measures as we go into this rate case,” Rasoul said during a House subcommittee meeting on Tuesday, referring to the recent unusually prolonged cold and icy conditions that gripped the commonwealth beginning in late January.
Between 2007 and 2024, the average Appalachian Power residential bill rose from $66 to about $174, or about 164%, according to the SCC. That outpaced the approximately 50% rate of inflation during that same time.
More recently, the average residential bill went down about $10 as of Nov. 1 as Appalachian Power decreased the fuel costs that it passes on to customers. State regulators approved an increase of about $4, set to take effect next month, related to renewable energy costs.
Last year, the General Assembly passed legislation that allowed Appalachian Power to bundle costs associated with two coal power plants and with storm recovery into bonds to be sold to investors.
The utility has said this will lower customer bills because payments on the bonds would be less than if the costs were part of customers’ electric rates.
Amanda Cox, representing Appalachian Power, said the utility does not oppose the newer version of Rasoul’s bill: “It’s a lot better than it was.”
She noted that work continues on the financial arrangements that were authorized by last year’s bill and that Appalachian Power’s electric rates are in the “middle of the pack” across Virginia power companies.
“There’s a lot more work to do and we hope to see more benefits for our customers and our communities,” Cox said.
Rasoul’s original bill for this year’s General Assembly was pitched during a bipartisan press conference last month.
It would have prohibited the SCC from raising Appalachian Power’s authorized rate of return — which, for a regulated utility, is essentially its profit level — unless the company could show that an increase wouldn’t affect customer affordability.
It would have instructed the SCC to consider factors such as inflation and customer disconnections when setting the rate of return.
And it would have instructed the state attorney general’s office to work with an independent expert to develop recommendations for improving how regulators determine Appalachian’s rate of return.
Those measures were dropped in the newer version of the bill.
Representatives from nonprofit groups, including Appalachian Voices, Clean Virginia and the Virginia Poverty Law Center, spoke in favor of the newer bill on Tuesday.
Risë Hayes, a Lynchburg resident who unsuccessfully ran for the House of Delegates last year but testified Tuesday simply as an Appalachian Power customer, also favored the bill.
“Almost every single week in our city’s Facebook page, someone is asking why their electric bill is extremely high. … Anything that can help relieve the cost of the current electric bills would be extremely helpful,” Hayes said.
The vote — initially recorded as 4-3 but later amended to 6-3 — to advance Rasoul’s bill out of a House of Delegates subcommittee on Tuesday and on to the full Labor and Commerce committee fell along party lines, with Democrats favoring it and Republicans opposed.
A companion bill, SB 691 from Sen. David Suetterlein, R-Roanoke County, awaits action in a Senate committee.
Appalachian Power, a subsidiary of Columbus, Ohio-based American Electric Power (NASDAQ:AEP), has about 540,000 customers in western Virginia.