Kanawha County Commission opposes Appalachian Power proposed settlement

Story by Brad McElhinny

CHARLESTON, W.Va. — The Kanawha County Commission is opposing a proposed settlement in a big and longstanding power company cost recovery case, saying it is “one-sided and overreaching.”

“It places an insufferable burden on ratepayers and grossly neglects their best interests,” wrote representatives of the commission representing the largest county in the state.

Kanawha commission officials sent a letter this week to the West Virginia Public Service Commission, urging rejection of the proposed settlement that was put forward by Appalachian Power and Wheeling Power.

Appalachian Power and Wheeling Power filed a potential settlement earlier this week, proposing to bundle hundreds of millions of dollars in costs into a single product for investment through bonds. The companies would get a lump sum, and the investment would pay off for bondholders over roughly 20 years.

For power company customers, advocates of the proposed settlement suggest the structure would curtail the sticker shock of sharply higher rates. Supporters of the settlement say the format would delay future cost recovery requests while also extending the full cost over a long period of time.

The power companies, which are subsidiaries of American Electric Power, hammered out the settlement proposal with representatives of the West Virginia Coal Association and the West Virginia Energy Users Group, which represents big industrial power customers.

“We are confident this settlement will achieve the most stable outcome and least rate impact possible for our West Virginia customers,” said Aaron Walker, Appalachian Power president and chief operating officer.

“We encourage the PSC to approve the settlement, which will keep customer bills affordable and support a reliable energy system.”

The Kanawha commission objects that the entities that signed the proposal did not include all parties to the case.

This cost recovery case kicked off in 2021. As coal and natural gas prices rose dramatically that year and remained high throughout 2022, the power companies said they paid far more for fuel and purchased power than the amount included in rates. Over a year, unrecovered costs grew from $216 million to almost $553 million.

The full ask, including $88 million in anticipated future costs, is $641 million.

The Consumer Advocate Division of the Public Service Commission has maintained that the cost recovery request is too much by a couple hundred million dollars. The watchdog’s position is that the power companies should be denied a significant amount of their claim and that the rest should be paid over a period of several years.

The consumer advocate says it would oppose the proposed settlement.

The Kanawha County Commission goes even farther, saying the entire cost recovery claim should be rejected.

“It is the unwavering position of the KCC that the relief sought by APCo should be denied in its entirety,” wrote county officials.