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Appalachian Power Company has proposed a new rate increase that could raise electricity bills by 18 percent.
If the proposal and other pending rate increases receive state approval, APCo’s average residential customer, using 1,000 kilowatt hours of energy per month, would get a bill for $122, compared to about $93 now.
APCo President Dana Waldo said he knows customers are struggling to make ends meet in the recession. However, the higher price is needed to pay for the actual costs of producing electricity, he said.
“We keep the lights on every day for our half-million Virginia customers by producing the power (they) need and when they need it,” Waldo said. “There’s a lot of infrastructure behind the light switch, and customers should know more about what it costs to keep the lights on.”
Waldo announced the new rate hike Wednesday in a news conference at APCo’s Roanoke office. He said that the company was filing a request with Virginia’s State Corporation Commission seeking an increase in its base rates lasting through 2011.
The base rate increase would raise the average residential customer’s bill 18 percent to $109.89. Combined with fuel and environmental surcharge increases APCo asked for in May, an average residential customer would pay $122.10 per month, Waldo said.
Even with the increase, the average household would pay less than $4 per day for electricity, which Waldo said makes it a good value, considering all that electricity does. “That’s less than a meal deal at most fast-food restaurants,” he said.
APCo’s costs have been strained by rising demand for electricity and the costs of complying with environmental regulations. Also, the cost of obtaining capital has increased, Waldo said.
The company has instituted several measures to save money and produce electricity more efficiently, including a freeze on salaries and tighter limits on business travel, Waldo said.
The company is asking customers to find ways to reduce the amount of electricity they use. Conservation would cut the amount of a customer’s bill, as well as decrease the strain on APCo’s system. Through its “Watt, Why & How” program, APCo suggests actions such as getting rid of an extra refrigerator and washing clothes in cold water.
“We’re not asking people to go without,” Waldo said. “We’re asking them to use the product wisely.”
Waldo said that in addition to seeking a rate increase, APCo is more than quadrupling the amount it gives to programs that help low-income people pay their electricity bills.
Last winter, APCo gave $210,000 to such programs. This year, it will give more than $1 million, according to a news release.
Low-income assistance programs in Virginia will receive $500,000 from APCo.
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