Welcome to the Summer 2023 issue of the West Virginia Energy Consumer Update, a publication of 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 production and consumption in West Virginia and its impact on the state’s economy. Our goal is to promote changes necessary to position West Virginia as a leader in the energy field and advance West Virginia’s economy.
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.
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West Virginia’s Electric Power Rates Continue to Increase, Undercutting Economic Competitiveness |
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West Virginia’s regulated electric rates continued to increase in 2022 to the detriment of all ratepayers, including manufacturing, industry, mom-and-pop businesses, and senior citizens on fixed incomes.
On the American Electric Power system, which includes Appalachian Power and Wheeling Power, the Public Service Commission (“PSC”) authorized almost $125 million in so-called “ENEC” revenue increases related to fuel and purchases of power, in addition to another $15 million for assorted surcharges in 2022.
For FirstEnergy’s regulated electric utilities, Mon Power and Potomac Edison, the PSC approved revenue increases in 2022 of over $180 million in addition to another $92 million at the beginning of 2023.
According to the most recent objective data issued by the Energy Information Administration (“EIA”), West Virginia’s average electric rates for large manufacturing and industrial companies rank 18th lowest, and are higher than Kentucky, New York, and various other states.
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In fact, per EIA data, in the twelve months ending in March of this year, West Virginia’s large manufacturing and industrial electric rates have increased on average by 15%. For WVEUG members, that translates into approximately $75 million in additional costs per year, making it all the more difficult to remain viable in competitive national and international markets and hindering the retention and growth of West Virginia businesses and jobs.
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FirstEnergy and AEP Seek Additional, Staggering Electric Rate Increases |
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In early June, FirstEnergy, on behalf of Mon Power and Potomac Edison, filed for another $207 million revenue increase as part of a full Base Rate Case filing. If approved, residential and commercial consumers would bear rate increases of 15% and 12.5%, respectively, while large manufacturing and industrial rates would increase by 9.4% under the FE proposal. WVEUG, among other parties, will be litigating the case before the PSC with new rates resulting from a final PSC decision expected to take effect in early 2024.
It is also expected that the FirstEnergy Companies will seek an additional increase of over $200 million with a new “ENEC” fuel surcharge filing due in late August.
AEP, on behalf of APCo and Wheeling Power, recently filed for a revenue increase of over $640 million with respect to its ENEC fuel and power purchase costs. AEP has offered two alternative rate recovery proposals that would mitigate the massive proposed increase to some degree, but even those proposals portend of rate increases of at least $90 million this fall and potentially as high as nearly $300 million. Again, WVEUG, along with other parties, is actively litigating this case before the PSC, with a probable decision issued later this summer or early fall.
In light of the 2022 increases described above, it is axiomatic that these new and additional rate increase case filings can only serve to undermine West Virginia’s economic competitiveness and the public interest.
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Legislature Helps Level Playing Field for Development of Electric Power Generation |
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WVEUG consistently advocates in support of free market competition, where feasible, for all aspects of electricity pricing and related infrastructure and development. That includes supporting a level playing field for all electric power production without artificial regulatory support or subsidies, regardless of fuel source – renewables, nuclear, coal, or natural gas. In that vein, during the 2023 General Session, the Legislature passed SB 188, the Grid Stabilization and Security Act, which reflects fair, common sense changes to the permitting process for the development of natural gas fired power plants in West Virginia.
Since the beginning of the Marcellus Shale natural gas play, no new natural gas power plant has been successfully developed in West Virginia, despite West Virginia’s ample natural gas supplies and the development of several such plants in neighboring Ohio and Pennsylvania (one such plant came online in Ohio just last week). In fact, within the past several years, three separate projects targeted for development in West Virginia were fatally stalled as a result of the lengthy regulatory and related litigation process in the state (while within the same timeframe, multiple wind and solar projects have been developed). SB 188 targets the imbalance of this reality, and its passage should help West Virginia foster an “all-of-the-above” portfolio of energy resources.
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