APCo offers deal on electric bills

RICHMOND — Appalachian Power Co. offered Wednesday to temporarily stop collecting the rate increase it imposed in December, but only if legislators stop trying to impose tougher rules on the company.

Many APCo customers in Lynchburg and counties to its west complained to legislators about bills that doubled — or worse — in January. Lawmakers have filed nine pieces of legislation in the General Assembly that would regulate the company more strictly.

Two legislators from eastern Virginia called APCo’s offer, which might cost the company $50 million by August, an “unprecedented” gesture.

Del. Ward Armstrong, D-Henry County, called the offer “a good first step, but just a first step.”

Customers’ bills might realize a $15 reduction for six months, Armstrong told the Virginia Commission on Electric Utility Regulation.

Many customers have complained about January bills of $200 or more. APCo says cold weather caused most of the high bills, and December rate increases were a smaller part of the bills.

Armstrong and six other lawmakers from APCo’s territory in Western Virginia have filed bills to curb a rapid series of rate increases. Hearings on those bills are scheduled in the House of Delegates starting today and in the Senate on Monday.

The commission reviewing the legislation Monday recommended that the other legislative committees approve just one measure. That legislation would halt the utility’s practice of collecting new rate increases before the State Corporation Commission has approved them.

Dan Carson, APCo spokesman in Richmond, said the company’s offer to suspend its latest rate increase was good only if lawmakers drop all but one of the nine pieces of legislation that could affect APCo rates and the way they are regulated by the State Corporation Commission.

If the measure that APCo favored Wednesday becomes law, electricity bills sent out the day after it passes would be billed at the lower rates in effect before December. The measure would not be retroactive, so bills sent out any time before the governor signs the measure would still have the higher rates.

If the other legislation moves forward, “that offer is not on the table anymore,” Carson said after Wednesday’s meeting. “We can’t make this commitment and at the same time be faced with this legislation being enacted, even the possibility of it, as early as July 1,” Carson said.

Carson said he didn’t know, and could only estimate, the amount of revenue APCo might surrender if it postpones further collection of its last, interim, rate increase until August. “The potential could be as much as $50 million,” he said.

Del. Terry Kilgore, R-Gate City and chairman of a House committee that will hear utility-rate legislation today, told the commission that, “We will hear these bills,” although the commission reviewing them Wednesday recommended only one of the original nine pieces of legislation.

Some of the bills would allow the State Corporation Commission to regulate APCo rates under the same standards that applied in the 1990s, before the standards were relaxed by a series of legislative changes.

Carson said a return to the 1990s standards “would be seriously debilitating” to the company’s revenues.

Sen. John Watkins, R-Midlothian, described APCo’s delayed increase as “unprecedented” and told other members of the panel Wednesday that APCo has been forced to raise rates as it seeks to comply with federal clean-air requirements for coal-burning power plants.

About 90 percent of APCo electricity is generated in coal-fired plants.

Sen. Richard Saslaw, D-Fairfax County, told the panel members that Virginia’s other major utility, Dominion Power, hasn’t had as many rate increases as APCo and his constituents haven’t complained to him.

Dominion generates only half its power with coal. Nuclear plants, which don’t pollute the air, supply 40 percent of Dominion’s power.