Welcome to the second 2021 issue of the WV Energy Consumer Quarterly Update, as published by the West Virginia Energy Users Group (WVEUG). We aim to provide accurate, fact-based information on energy rates and issues, in part to clarify ongoing misunderstandings about energy consumption in West Virginia and its impact on the state’s economy. Our goal is to ensure that West Virginia is focused on making the changes necessary to advance West Virginia’s economy and enhance its position as a leader in the energy field.
We 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.
|
|
For the ten-year period from 2007 through 2016, West Virginia’s electric rates increased more than any other state?
FACT! Per U.S. Energy Information Administration (EIA) data collated by Missouri Senate staff comparing rate changes nationwide.
West Virginia is a leading producer and exporter of energy?
FACT! West Virginia is ranked 5th in the nation in total energy production and is a net exporter of power.
West Virginia has low electric rates?
FICTION! Per EIA data released at the end of June (showing rates in April), the average electric rate in West Virginia for industrial end-users is 6.14 cents/kWh, placing West Virginia in the middle of the pack (21st lowest industrial electric rate in the country), with industrial rates higher than those available in Kentucky, Pennsylvania, and Virginia, among others. West Virginia’s average residential rates fare slightly worse, ranked as only the 23rd lowest in the nation.
|
|
The Legislature Continues to Play a Key Role in Shaping West Virginia’s Energy Future |
|
The 2021 Legislative Session was, as has been the case in recent years, rife for broaching legislative efforts to guide the regulatory arena for electricity and natural gas.
Among a wide array of bills introduced during the session, two bills of note that passed into law include:
-
Senate Bill 542, codifying minimum coal supply contract requirements and future notice requirements, but declining to require “must run” language that could have proven to be uneconomic and costly to utility ratepayers.
-
House Bill 3310, which favorably embraces “free market financing” for end-use customers to enter into power purchase agreements for the on-site installation of solar power facilities (up to 2 megawatts for large users) without the third-party provider being considered a public utility. It is noteworthy that this bill also allows these alternative electric resources to be accessed by utility ratepayers up to a maximum of 3% of each electric utility’s annual aggregate customer peak demand, which is over 150 megawatts for AEP and FirstEnergy combined.
Bills of note that failed to pass out of the Legislature include House Bill 2792, which would have favorably expanded direct market access for existing natural gas consumers, and House Bill 2959, which would have codified arguably pro-utility, anti-ratepayer expedited surcharge cost recovery mechanisms for the electric utilities’ environmental compliance costs (which have always been approved for cost recovery under the traditional process).
WVEUG’s Executive Committee believes that legislation and regulatory rulings that allow the utilities to impose multiple surcharges on captive ratepayers, get accelerated cost recovery, and maintain control over new renewable resources not only shift the risk of investment from utility shareholders to captive ratepayers and raise rates, but they make West Virginia that much less competitive. It makes no sense to strip away the customer protections inherent in traditional regulation while allowing the utilities to essentially maintain their traditional monopoly power.
WVEUG’s long-term goal is to have an “all options on the table” array of power choices for business and industry, including utility offerings and special contracts, flexible on-site generation options, direct contracting with third-party power producers of any fuel type including renewables, and access to the competitively priced power that already exists in the PJM market in which West Virginia operates. West Virginia should be open to the free market and moving away from government regulation that favors the utilities; it’s what’s best for the West Virginia economy.
|
|
Rate Increase Cases Mount before the Public Service Commission
|
|
So far this year, AEP, on behalf of APCo and Wheeling, has pursued six separate cases at the PSC associated with rate surcharges. In the aggregate, AEP’s filings portend of well over $120 million in rate increases to customers this year, and there is an indication from AEP that they may file two more rate surcharge cases before the end of 2021.
FirstEnergy, on behalf of Mon Power and Potomac Edison, continues to pursue somewhat neutral rate changes to complete adjustments associated with the Tax Cuts and Jobs Act. FE also will be filing for fuel cost surcharge and vegetation management surcharge rate changes later this summer, and it remains to be seen if FE will pursue and seek to impose on ratepayers any other new surcharges.
Various other utility cases are proceeding as well, including a Dominion Hope natural gas base rate increase case, a West Virginia American Water Company base rate increase case, and the ongoing case addressing the acquisition of Mountaineer Gas Company by UGI Corporation.
The West Virginia Energy Users Group has intervened in (or will intervene in) all of these cases to protect the interests of large consumers of power. If you are interested in supporting that effort, please contact us.
|
|
|
|
|
|
|
