Issue 1, 2020
Welcome to the inaugural issue of WV Energy Consumer Quarterly Update , as published by the West Virginia Energy Users Group (WVEUG). With this e-newsletter, we hope to provide accurate, fact-based information on energy rates and issues in West Virginia so that the state can be focused on making the changes necessary to advance West Virginia’s economy and enhance its position as a leader in the energy field.
We sincerely hope you find this information valuable. If you think a friend or colleague should receive this e-newsletter, or if you wish to be removed from the mailing list, please email us .
WV Electric Rates for Business and Industry Remain “Middle of the Pack”
Per U.S. Energy Information Administration (EIA) data released late last month, the average electric rate in West Virginia for industrial end-users of 5.95 to 6.07 cents/kWh ranks as only the 22nd lowest electric rate in the U.S.  A decade ago, West Virginia had industrial electric rates that were consistently among the lowest four or five states in the nation. Now, West Virginia’s average industrial electric rates are higher than those in New York, Ohio, Kentucky, and many other states. For FirstEnergy’s West Virginia operating companies – Potomac Edison and Monongahela Power – the average electric tariff rate for manufacturing and industrial users is lower at 5.66 cents/kWh, which would place about 17th lowest in comparison to the average industrial rates in other states per EIA. The average electric tariff rate for large users on the AEP-West Virginia system (including Appalachian Power and Wheeling Power), however, is currently about 6.23 cents/kWh, which would rank 24th in comparison to average industrial rates in other states, and AEP’s rates will be increasing soon.
**Based on EIA Table 5.6.A, released June 24, 2020.
WV Public Service Commission Approves Settlement Rate Increase for AEP
By virtue of two Orders issued in June 2020, the PSC approved a Settlement entered into by the parties to two AEP cases involving its Expanded Net Energy Cost (ENEC) rate and its Vegetation Management Program (VMP) charge. As filed earlier this year, AEP, on behalf of Appalachian Power and Wheeling Power, had sought to increase revenues collected from customers for the ENEC and VMP by about $150 million with new rates (offset in part by tax-related credits) effective on July 1, 2020. Per the Settlement, the initial proposed revenue increase was cut back by $60 million, and the changes in rates for customers was delayed until September 1, 2020, in part to help protect customers from rate impacts during the COVID-19 pandemic. Per the Commission’s Order, AEP may not seek to change its ENEC and VMP rates again until September 1, 2021. Parties to the Settlement included the West Virginia Energy Users Group, PSC Staff, the Consumer Advocate, and AEP.
COVID-19 Impacts on Energy Users Continue
Because of the impact of the COVID-19 pandemic on various facets of the economy, many industrial and manufacturing companies have had to adjust their production and operations in a manner that can lead to inflated power bills as result of contract provisions designed to ensure that utilities have enough capacity to meet large users’ needs when they are fully operational. Because many are not fully operational at this juncture or are otherwise challenged by the current economy , recourse has been sought to, among other things, extend payment terms, temporarily revise “minimum demand” features of contracts, and/or to address changes in what is referred to as a customer’s “load factor” (which captures the generally lower cost to serve a customer that is consistently operating at full production). The West Virginia PSC has issued a series of Orders addressing the pandemic, including Orders that acknowledge the need for regulated utilities to be flexible with individual customers at all levels that have been facing difficult circumstances due to COVID-19 and its effects.