Appalachian Power and Wheeling Power have asked the Public Service Commission to approve a rate increase of more than $108 million, which would raise the average customer's bill by more than $8 per month.
The companies - both American Electric Power affiliates - filed a case Tuesday asking the commission to approve an increase in the company's expanded net energy surcharge, which is meant to cover expenses like fuel costs and energy purchases from other power companies.
If the commission approves the entire rate increase, the average Appalachian Power or Wheeling Power customer using 1,000 kilowatt hours will end up paying $125 per month, about two dollars less than the national average. The two companies serve residents in 25 counties in West Virginia.
The request to increase people's electric bills comes at a time when electricity rates throughout the Mountain State have continued to climb, partly because of West Virginia utility companies purchasing large coal-fired power plants from their parent companies in 2013 and the commission approving surcharges for things like improved tree trimming efforts in the past couple years.
According to the current case, about $65 million of the request is meant to pay for fuel and power purchases that have already been made. Another $8.2 million would be used to cover future costs for things like coal at the John Amos, Mountaineer and Mitchell power plants.
But the companies are also requesting money for operations that were not included when the expanded net energy cost surcharge was initially established by the commission.
Appalachian Power officials are requesting $2.8 million to cover the remaining costs from takeover of the John Amos Plant near Poca, $4.5 million for the conversion of the Clinch River Plant in Virginia to natural gas and $19.6 million for several electric transmission projects in the state, including millions of dollars for upgrades to transmission lines running through the Kanawha Valley.
In past PSC cases, lawyers representing residential customers and some of the state's largest commercial and industrial electric users have argued that those additional costs should be part of a utility company's general rate case and should not be included in surcharge cases that are filed every year.
Those lawyers argue that allowing electric utility companies to recover plant purchases, facility upgrades and transmission project costs through additional charges placed on customers' bills is allowing companies to push the risk of investment off of stockholders and onto customers.
Appalachian Power argues otherwise. Company officials have stated that without the use of a surcharge the company won't be able to recover their money from customers quickly enough.
"While the costs of the transmission projects and the Clinch River project could be recovered through general rate cases, general rate case recovery of these costs is not well suited to deal with the situation currently facing the companies," Appalachian officials wrote.
In the current case, company officials explain that the commission has already approved the use of a surcharge to recover electric transmission project costs and money spent on scrubbers at the John Amos plant and the Mountaineer Plant near New Haven.
Another problem for the utility companies is that coal-fired power, which makes up the vast majority of their generating capability, is being out competed by gas-fired power plants throughout the eastern United States.
That means the cheaper power from natural gas is often being purchased by other utilities in need of more electricity before they turn to coal-fired plants.
"The low natural gas prices, along with the coal plant retirements, resulted in an increase in electric generation demand for natural gas, which surpassed coal as the leading source of electricity generation in the U.S. on a monthly basis for the first time in April," Appalachian officials wrote.
According to the company's filing, Appalachian Power and Wheeling Power used roughly 10 and 12 percent less coal than company officials had forecast in 2015.
The outlook for coal-fired power generation, company officials explained, may continue to shift as a result of the extremely low price of natural gas.
"Given the continued volatility of power demand and natural gas prices, the projected forecast of coal consumed is prone to shifts both up and down," they wrote.
Reach Andrew Brown at andrew.brown@wvgazettemail.com, 304-348-4814 or follow @Andy_Ed_Brown on Twitter.