ROANOKE, Va., December 11, 2009 – Electric service for Appalachian Power’s Virginia customers will be billed at higher rates beginning with service provided on and after December 12. The change in rates consists of two items. The majority of the increase will be collected on an interim basis and is subject to refund should the Virginia State Corporation Commission (SCC) ultimately approve a base rate increase amount that is lower than the $154 million annual revenue increase that company proposed in its current base rate request filed July 15. The remainder of the rate change reflects the Commission’s approval of an increase in transmission costs.
 
In August the SCC established a procedural schedule for the base case and public hearings were held in November in Rocky Mount and Abingdon. The evidentiary hearing is scheduled to begin March 16 in Richmond. As allowed under state law, the company is implementing the proposed increase in base rates subject to refund with interest.
 
The base rate component of electric rates covers the cost of day-to-day operations and the recovery of capital investment costs. It excludes some expenses such as certain transmission operations costs, which, also effective December 12, will be moved from base rates and collected under a separate Transmission Rate Adjustment Clause (RAC).   
 
This transmission component of customer bills is essentially a pass-through cost for charges paid to PJM, a Regional Transmission Operator, which oversees the flow of electricity on the bulk transmission grid in a multi-state area. Associated transmission costs are increasing by approximately $22 million annually.   The SCC approved the Transmission RAC in October.
 
Currently, a residential customer consuming 1,000 kilowatt-hours of electricity a month pays about $100.14. With the interim base rate and transmission rate increase, the monthly bill will be about 15.5 percent more at $115.78. Actual rates vary based upon customer class and consumption.
 
Customers are encouraged to use electricity wisely and visit WattWhyandHow.com where they can use energy-saving calculators and find energy-saving tips.
           
Appalachian Power provides electricity to 1 million customers in Virginia, West Virginia and Tennessee (as AEP Appalachian Power). It is a unit of American Electric Power (NYSE: AEP), one of the largest electric utilities in the United States, with more than 5 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s largest electricity transmission system, a nearly 39,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined.                                                                         ###