Column: PSC touts low power rates
CHARLESTON, W.VA.— The state Public Service Commission announced Monday that West Virginians pay some of the lowest electricity rates in the country.
No, it wasn’t an April Fools’ joke.
The commission was citing new data from the U.S. Energy Information Administration.
In its 2013 survey of average electricity rates, the agency found West Virginia residents paid the sixth-lowest power rates in the country last year. The average retail price for electricity in West Virginia was 9.52 cents per kilowatt hour in 2013 — less than all of the surrounding states.
Maryland averaged a 13.24 cent per kilowatt hour rate, followed by 12.82 cents in Pennsylvania, 11.91 cents in Ohio, 10.83 cents in Virginia and 9.71 cents in Kentucky.
The only states with residential rates less than West Virginia’s last year were Arkansas, Idaho, Louisiana, North Dakota and Washington. Those states averaged rates between 8.67 and 9.51 cents in 2013.
New York residents paid the highest rates in the country last year at 18.81 cents a kilowatt hour — nearly double the West Virginia average. New York was followed in the rankings by Connecticut, Vermont, California and New Hampshire. Those states all had average rates greater than 16 cents a kilowatt hour in 2013.
The PSC said the typical West Virginia residential customer — one who used 1,000 kilowatt hours of electricity per month — saw an average electric bill of $95.20 last year. By comparison, customers using the same amount of electricity in the five states with the highest rates paid anywhere between $163.60 to $188.40 a month in 2013 the PSC said.
Last year was a rare one for state power utilities.
For the first time in five years, the state’s two largest power providers — Appalachian Power and Monongahela Power — saw their rates go down, according to the 2013 annual utility report from the state Consumer Advocate Division.
The PSC in August ordered Appalachian Power to cut the portion of its power rates tied to fuel costs by $50 million. In October, the PSC ordered Mon Power to cut the fuel component of its rates by $129.5 million.
While the drop in rates was a good thing, the Consumer Advocate Division didn’t see them staying down for long.
“Unfortunately, most indicators point to continued pressure on electricity rates in the future,” the division’s annual report said.
The Consumer Advocate Division’s prediction already appears to be coming true.
Appalachian Power and Wheeling Power have already asked the PSC to approve a 4.4 percent increase in the fuel component of their rates. That would generate about $68 million in revenue — wiping out the previous $50 million reduction — and increase the average residential customer’s monthly bill by more than $4.
The companies’ proposal appears to be designed as an incremental increase ahead another increase in 2015. That’s when Appalachian Power plans to retire 1,270 megawatts of generating capacity from some of its older coal-fired power plants in order to comply with environmental regulations.
Those retirements could further increase costs, and rates, in 2015.
Rates will also likely be pushed higher by the power companies’ recently approved vegetative maintenance plans, designed to clear trees from company rights-of-way and help prevent the widespread outages that occurred following the 2012 derecho and Superstorm Sandy.
The companies said those maintenance plans would increase costs by about $44 million in coming years. The PSC said it would deal with how to recover those costs in the companies’ next base rate case, which are expected to be filed this summer.