Despite profit, American Electric Power eyes rate hike
WHEELING — American Electric Power earned $454 million during the first three months of this year, but the firm now wants to raise bills for West Virginia residential customers by nearly $15 per month.
The Mountain State operating subsidiaries of Columbus, Ohio-based AEP — Appalachian Power and Wheeling Power — jointly filed the rate increase request with the Public Service Commission of West Virginia last week. In the $114.6 million revenue request, AEP cites “significant decline in the amount of electricity used by customers” as a major reason for the rate hike. The company also said it serves 11,000 fewer customers than it did in 2013.
The rate increase mainly affects residential and commercial users, as their bills will jump by about 11 percent per month. Conversely, industrial users would see an increase of only about 1 percent.
“It includes the cost of maintaining and improving utility infrastructure, higher state and local taxes, a reduction in federal income taxes and significantly lower customer usage,” said Appalachian Power President and Chief Operating Officer Chris Beam regarding the request.
The company said electricity usage for residential customers is down 14 percent compared to 2013 rates.
Officials also cite “major infrastructure investments in the last several years” as another reason for the increase. These include upgrades to AEP’s distribution systems in Wheeling, Charleston and Huntington, officials said.
“We continue to invest in our transmission and distribution network to ensure that service remains reliable,” said Beam. “Our goal is to balance our customers’ service expectations with the need to keep prices as low as possible.”
Officials said they would have requested more of an increase, but decided against it after realizing a $52 million reduction in federal income tax liabilities via the Tax Cuts and Jobs Act of 2017.
The commission can take up to several months to make a decision on the rate hike, but AEP officials are requesting that it go into effect June 8.
Appalachian Power and Wheeling Power are among the subsidiaries operating of AEP, which also maintains infrastructure in states such as Ohio, Kentucky, Indiana and Texas. Companywide, the firm posted earnings of $454 million for the first quarter of 2018.
“We benefited from more normal winter weather in the first quarter of 2018, compared with last year. We also are seeing positive economic indicators in the regions we serve,” said AEP Chairman, President and CEO Nicholas K. Akins of the January through March performance. “Retail sales increased for all customer segments in the first quarter, and industrial sales also were higher for the top 10 industrial sectors.”
Akins also recently released the company’s annual accountability report. Whether by scrubbing, applying carbon capture technology or simply cutting the use of coal, the firm endeavors to curb carbon dioxide emissions by 60 percent by 2030.