Issue 2, 2020
Fall Greetings!
Welcome to the second issue of WV Energy Consumer Quarterly Update, as published by the West Virginia Energy Users Group (WVEUG). Our goal remains 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.
West Virginia’s Electric Rates for Business and Industry Are Still Stuck in the “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 has increased slightly since our last report and now ranges between 6.03 and 6.22 cents/kWh. West Virginia ranks as having only the 22nd lowest electric rate in the U.S. West Virginia’s average industrial electric rates remain higher than those available in New York, Ohio, Kentucky, and other states, although they are objectively lower compared to Maryland and Virginia. 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 13th 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 (Appalachian Power and Wheeling Power), however, has increased in this quarter to 6.76 cents/kWh, which would rank 28th in comparison to average industrial rates in other states. The disparity between FirstEnergy and AEP rates is becoming more stark, making the potential for economic development or expansion in West Virginia more challenging depending on which utility service territory is of interest to a business.
**Based on EIA Table 5.6.B, released September 24, 2020.
FirstEnergy Files for Rate Changes at the Public Service Commission
In late August, FirstEnergy, on behalf of Potomac Edison Company and Monongahela Power, filed with the PSC two cases seeking modifications to customer rates. In pertinent part, in a case to address its Expanded Net Energy Cost (ENEC) charges, FirstEnergy is proposing to decrease rates by approximately 5% effective on January 1, 2021, although the companies are also seeking rate recovery from customers for gross costs associated with COVID-19 expenses. In a contemporaneous filing, FirstEnergy is separately seeking to require its ratepayers to pay for investments it must make to ensure compliance with environmental regulations; as proposed, FirstEnergy revenues would increase by about $5 million also on January 1, 2021. The West Virginia Energy Users Group has intervened in both cases to protect the interests of large consumers of power, as have other parties, including the PSC Staff, the Consumer Advocate, and the Sierra Club. The Commission has set a procedural schedule providing for Hearings in early December to facilitate a decision that will allow new rates to take effect in 2021.
Dominion-Hope Seeks Natural Gas Rate Increase at the PSC
In late September, Dominion Energy West Virginia (formerly Hope Gas) filed with the Public Service Commission a full “Base Rate Case,” seeking an increase in natural gas rates paid by consumers of about $35 million annually, based on a proposed Return on Equity of over 10%. For some large consumers on the Dominion system, the net proposed increases could approach nearly 15%. Dominion also proposes other changes to its tariff that may impact the nature and terms of service for customers in the future. WVEUG is evaluating the case and anticipates intervening in the near future. It is the first full Base Rate Case that Dominion has filed in more than a decade. New rates resulting from the case would likely be effective following a Commission decision in mid-2021.