January 1, 2024 - Appalachian Power and Wheeling Power are close to finding a solution in a long-running cost recovery lawsuit. The two companies won't raise their rates if the West Virginia Public Service Commission approves their settlement.

The West Virginia Energy Users Group and the West Virginia Coal Association are closely monitoring the proposed settlement. It focuses on a balance of $553 million that has been accumulating since 2021.

This settlement includes a securitization approach if it gets approved. This method combines assets that produce income into one product for investors. The power companies would then be able to reduce the impact on customer bills over a longer time frame. House Bill 3308, which was passed recently, made this approach possible.

Of the total recovery balance, the companies are waiving $50 million. This means that the securitization package would include $503 million from the balance. It would also include $120 million in recent costs and significant storm costs.

All parties involved aim to keep rates reasonable for customers and keep operations cost-effective in West Virginia. If the Commission approves the settlement for the Expanded Net Energy Cost, a financing order request will be the next step.

The West Virginia Energy Users Group thinks this settlement is fair. They appreciate the $50 million waiver by the power companies. They also support the securitization efforts that protect customers from about $500 million in extra costs.

If the settlement is not approved, customer ENEC rates might go up by 2024. If it is approved, these rates could stay the same until 2025.

In 2021, fuel costs soared for some power companies as coal and natural gas prices increased significantly. The companies spent much more than was included in the rates. The unrecovered costs for a year jumped from $216 million to nearly $553 million. A settlement could be reached, but it depends on the PSC's decision.

The West Virginia Energy Users Group believes this solution is reasonable. They think it protects all customer classes evenly. They also believe the settlement benefits the public and the state's economy. They would see the settlement's approval as a win if the Commission had come up with the core ideas of the settlement.