Senate OKs one APCo measure, kills another

RICHMOND — Legislation that keeps alive Appalachian Power Co.’s offer to temporarily suspend its December rate increase won approval in a Senate committee Monday.

Another bill, which would have regulated the company more strictly, died in the committee.

Sen. Steve Newman, R-Lynchburg, gently supported the bill that was voted down.

“You almost have to live there to understand how that affects us,” Newman said. “There are people who have really been hit” by high APCo bills and had to make “very tough life choices,” he said.

Sen. Roscoe Reynolds, D-Henry County, urged the Senate Commerce and Labor Committee to approve his measure, SB 74, which he said “would take us back to how regulation was done before we started down the deregulation path” in 1997.

APCo started collecting four separate rate increases in 2009, Reynolds said, and his legislation would have cut that down to a maximum of two rate cases per year.

Under terms of a compromise APCo offered to legislators, the company would stop collecting the last of those increases temporarily, from mid-February until August. The compromise bill, sponsored by Sen. Phillip Puckett, D-Tazewell, won unanimous approval in the committee.

On customer bills that approached the $500 range in January, the temporary cut would amount to roughly $50 under examples cited last week.

While the measure offers some immediate relief, residents of his district need more help, Reynolds said.

“Since this was announced last week, every message I have received has been, ‘Don’t let them get away with it,’” meaning “the so-called deal,” Reynolds said.

Newman asked several people during the hearing to clarify whether APCo’s rate increases were approved under re-regulation legislation that was approved in 2007.

Sen. Tommy Norment and an APCo spokesman both said the recent increases were approved by the State Corporation Commission under regulations that applied before 2007.

Norment, R-Williamsburg, also said that Appalachian Power’s base rates hadn’t changed from 1985 through 2007, although the company had other rate increases during that time to pay for fuel cost increases and environmental upgrades.

“At the time we started deregulating” utilities, Norment said, Appalachian Power “was coming in with, in my opinion, artificially suppressed rates that they had not made any adjustment to in quite some time.”

“What has happened is, you had the horrible coincidence” of the company “catching up on a realistic rate structure” at the same time homeowners used more power “due to some incredible weather circumstances, and it’s almost the trite expression of ‘the perfect storm,’” Norment said.

Newman was on the losing side of the 9-3 committee vote that killed Reynolds’ bill.

A nearly identical bill, sponsored by Del. Ward Armstrong, D-Henry County, is pending in the House of Delegates where a committee is expected to consider it today.

Like Reynolds’ bill, Armstrong’s measure is strongly opposed by APCo and Dominion Power, the state’s largest electric utility.