Legislators respond to APCo rate increases

Friday, January 29, 2010

By JOEL TURNER - Staff Writer

State legislators have responded to complaints and anger by their constituents over higher electric bills by filing at least nine bills in the General Assembly that would limit Appalachian Power Co.'s (APCo) right to raise rates.

Franklin County's representatives in the legislature, State Sen. Robert Hurt (R-Chatham) and Del. Charles Poindexter (R-Franklin County), said they have received dozens of complaints from constituents who are upset about their electric bills.

Legislators respond to APCo rate increases

Friday, January 29, 2010

By JOEL TURNER - Staff Writer

State legislators have responded to complaints and anger by their constituents over higher electric bills by filing at least nine bills in the General Assembly that would limit Appalachian Power Co.'s (APCo) right to raise rates.

Franklin County's representatives in the legislature, State Sen. Robert Hurt (R-Chatham) and Del. Charles Poindexter (R-Franklin County), said they have received dozens of complaints from constituents who are upset about their electric bills.

Hurt said he believes that state legislators have an obligation to do what they can to help constituents who are facing large increases in their bills.

"To say that people are upset about their electric bills is an understatement," Hurt said Wednesday. Hurt said he has also heard complaints from businesses about large increases in their bills.

Poindexter's legislative assistant said he has received "many, many calls and emails from constituents very upset over their latest utility bills."

Poindexter has joined in co-sponsoring a proposal for a study that would "determine if it would be in the best interests of the commonwealth if Appalachian Power were to be replaced by another entity."

The rate issue is a "high priority for me. We are working hard to deal with it," Poindexter said.

Hurt is the co-sponsor of several APCo-related bills that have been introduced in the General Assembly, including one bill that would prohibit APCo from imposing an interim or temporary rate increase unless it has been approved by the State Corporation Commission (SCC).

APCo imposed an interim rate increase of about 12.8 percent in December for an average residential customer, but the SCC has yet to approve the increase. Another bill would limit APCo's rate increases to 5 percent in areas with unemployment rates of 5 percent or higher.Still another bill would require electric rates to be "just, reasonable and non-discriminatory."

Some legislators are considering even more far-reaching measures if APCo won't provide relief for its customers.

State Sen. William Wampler (R-Bristol) has introduced a Senate resolution (SJ145) for a state study of "alternatives to the monopoly service" provided by APCo. The study would "determine if it would be in the best interests of the commonwealth if Appalachian Power were to be replaced by another entity."

Hurt and Poindexter are co-sponsors of the resolution.

APCo's bills for electric service in December and early January increased substantially because of cold temperatures, increases in power consumption and APCo's interim rate increase. APCo has said that the large increases in December and early January were caused primarily by the long period of cold temperatures and increased consumption of power -- not the rate increase. However, the monthly bill of an average residential customer who uses 1,000 kilowatt hours has increased by more than 60 percent during the past two years because of rate increases.

At an earlier public hearing in Rocky Mount on APCo's latest rate increase, Poindexter said the economy is unlikely to improve during the next two years, and consumers will struggle to pay their electric bills. "Businesses are only hanging on and cannot absorb higher costs," Poindexter said. "Elderly people on fixed incomes are especially facing costs they cannot cover. Unemployed and underemployed people simply lack the funds to pay increased rates," he said. Local governments and school divisions also have rising costs which limit their financial ability to pay higher electric rates, Poindexter said.

Del. Ward Armstrong (D-Henry County), the House minority leader, and State Sen. Roscoe Reynolds (D-Henry County) have been outspoken in their opposition to APCo's rate increases. Both have introduced bills to restrict's APCo's ability to raise rates.

If APCo won't limit its rate increases, Armstrong has said that Southside Virginia might be better served by another power company.

They said higher electrical rates will make it tougher for Southside Virginia, especially Martinsville and Henry County, to recover from the worst economic problems since the depression during the 1930s. Higher electricity rates will mean the loss of more jobs in Southside Virginia, Reynolds said.

At the earlier hearing in Rocky Mount, Armstrong said that businesses and consumers can no longer afford APCo's constantly rising rates. He said APCo's has filed 11 requests for rate increases since 2006. Many people have seen their electric rates double during the past five years, he said. "People are struggling. Some have to decide whether they are going to buy food, medicine or pay the electrical bill," Armstrong said. "If this region of Virginia is ever going to recover, these electrical rate increases have to be stopped," Armstrong said.

House Majority Leader Morgan Griffith (R-Salem) has introduced legislation to restrict APCo's rate of return until it has an approved plan to build a generating plant in Virginia.

APCo officials said the rate increases are needed to recover their costs and provide a fair rate of return when environmental regulations are increasing costs.

Several state legislators met in Richmond Wednesday with APCo top executives to discuss the rate increases and the bills that would restrict APCo's ability to raise rates.

APCo officials briefed the legislators on steps that the company is taking to help customers who are having trouble paying their bills. However, the legislators said after the meeting that they will proceed with the proposed legislation to restrict APCo's ability to raise rates.