7/18/2008
SOARING COAL COSTS FORCE FUEL INCREASE REQUEST BY APPALACHIAN POWER FOR VIRGINIA CUSTOMERS

ROANOKE, Va., July 18, 2008 – Appalachian Power, a subsidiary of American Electric Power (NYSE: AEP), today made a filing at the Virginia State Corporation Commission (SCC) seeking an increase in the fuel factor component of its Virginia customer bills. The proposal reflects dramatic increases in the costs of coal caused by a growing global coal market and a relatively weak dollar leading to higher costs to fuel the company’s power plants.
 
The fuel factor comprises approximately one-third of a Virginia customer bill. It is approved by the SCC and increases or decreases with the costs of fuel used for the generation of electricity. It includes no company profit or mark-up. 
 
Appalachian has asked to implement the new factor on bills beginning Sept. 1.
 
If approved, the factor itself will increase to 2.255-cents /kilowatt-hour (KWH) from the current 1.418-cents /KWH. A residential customer using 1000 KWH in a month would see an increase from the current bill of $71.48 to $79.85—or 11.7 percent. 
  
As a whole, the revised fuel factor will increase by an average of 15 percent or a total of $132.5 million annually compared to current rates. Impact on individual customers is based on the amount of energy used. Higher-usage customers—including commercial and industrial customers—may see percentage increases that exceed the average. (Additional residential bill estimates may be found below.) 
 
  “Conditions in coal markets are dramatically different from those just a year ago when we filed for our current factor,” said Dana Waldo, Appalachian Power president and chief operating officer. “International demand for U.S coal and sustained domestic demand have outpaced supply resulting in a steep escalation of prices.”
 
According to Waldo, the company’s proximity to major coal supplies has not necessarily tempered increases in coal costs. “Appalachian Power plants use mainly Central (CAPP) and Northern Appalachian (NAPP) coals. The coal from suppliers in these regions is in greater demand from overseas and existing domestic markets.   Production from mines in these nearby areas has not geared up to meet growth in demand from both markets. As a result, we have seen a significant increase in the cost of these coals for our plants. For example, the price for a ton of CAPP coal has increased from $60 to about $140—or approximately133 percent—in just the last six months,” Waldo said. “However, the company has been able to use long-term contracts to mitigate the huge increases.”
 
While the fuel factor is generally set for 12 months, the company’s cost projections in this application cover the 16-month period Sept. 1, 2008 through Dec. 31, 2009.  Appalachian is requesting that the SCC set the new fuel factor for the entire period to ease the monthly impact on customers by collecting previously unrecovered fuel costs over a longer period of time. Appalachian expects to return to a calendar-year cycle beginning in January 2010. 
 
If approved, the proposed Appalachian Power fuel factor will remain the lowest for any investor-owned utility in Virginia.
 
An effective way to manage rising energy costs is to become a knowledgeable consumer and use energy wisely. Appalachian Power customers are urged to visit the company’s Web site at www.wattwhyandhow.com   to learn about energy saving ideas. Included on the site is an interactive Energy Calculator that allows customers to see how easy changes made to homes and businesses can help control energy usage and lower total costs.
 
The SCC will assign and publish case numbers and schedules for the application filed today. Documents relating to the case will be found on the Commission’s Web site at www.scc.virginia.gov. This proposed increase is separate from other Appalachian Power cases pending before the SCC seeking recovery of substantial environmental expenses and increased operating costs.
 
Appalachian Power provides electricity to 1 million customers in Virginia, West Virginia and Tennessee (as AEP Appalachian Power). It is a unit of American Electric Power (NYSE: AEP), one of the largest electric utilities in the United States, with more than 5 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s largest electricity transmission system, a nearly 39,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined.
 
Estimated Virginia residential customer bill impact

KWH /mo
Current bill
Sept 2008
% Change
500
$  40.23
$  44.42
10.42
1000
    71.48
    79.85
11.71
1500
  102.74
  115.30
12.23
2000
  133.99
  150.73
12.49
3000
  196.22
  221.33
12.80
4000
  258.19
  291.67
12.97
5000
  320.16
  362.01
13.07
 
 
 
 
 
 
 
 
 
 
NOTE: Estimates shown include an $8.40 customer charge and the state consumption tax; they do not include local taxes which vary. This chart assumes full approval and implementation of the new fuel factor on Sept. 1.
 
# # #

John Shepelwich
Manager State Corporate Communications
jeshepelwich@AEP.com

More From APCO

Take Charge

Save Money & Energy - Now & Later

Sign Up Now Pay Online for Free with Paperless Billing

Pay Online for Free with Paperless Billing

Learn more

Download our app

How We Restore Power Learn more

How We Restore Power

Visit AEP.com
Use of this site constitutes acceptance of the AEP Terms and Conditions. View our Privacy Policy. © 1996-2019 American Electric Power. All Rights Reserved.

Privacy Policy

Privacy Policy for Appalachian Power, a unit of American Electric Power (AEP)

Scope

This Privacy Policy applies only to AppalachianPower.com and the Appalachian Power customer mobile app (com.aep.customerapp.apco). Other AEP websites and apps may be governed by their own privacy policies, appropriate to the uses and needs of each. Throughout the site or app, we may provide links to resources and sites that are not part of AppalachianPower.com or the Appalachian Power customer mobile app. This Privacy Policy does not apply to those resources and sites.

Consent

By using this site or app, you consent to the terms of this Privacy Policy. Whenever you submit information via this site or app, you agree to the collection, use, and disclosure of that information in accordance with this Privacy Policy.

Information Collected

  1. Passively collected information

    During your use of this site or app, we may collect anonymous information about your visit here through the use of server logs, cookies, scripts, tracking pixels and other Web traffic tracking systems. This information is aggregated and used to improve user experience through analysis of user activities. This information is never combined with any of the personally identifiable information you may provide in your use of the features of this site or app.
  2. Personally identifiable information

    On certain forms of this site or app, you may be asked to provide information about yourself or your account with us, either to identify yourself to us or to request a service from us. In each case, we will inform you what information is provided at your option and what information is required to complete the transaction or activity you are engaged in. If you are unwilling to provide this required information, you will be unable to complete the requested transaction.

Use and disclosure of information

The information you provide to us will be used to respond to requests you may make for services. Some or all of this information may be added to your permanent account record and may be used for research purposes.

In addition, we may use elements of this information in the following situations:

  1. We may transfer the information to Appalachian Power’s affiliates and subsidiaries, unless such transfer is prohibited by law;
  2. We may transfer the information as part of a merger, consolidation, acquisition, divestiture or other corporate restructuring (including bankruptcy);
  3. We may make the information available to third parties who are providing the product, service or information that you have requested (but not your password);
  4. We may make such information available to third parties who are providing services to Appalachian Power (for example, providing the information to third parties performing computer-related services for Appalachian Power);
  5. We may use the information to communicate with you about products and services that may be of interest to you.
  6. We may disclose the information if we form a good-faith belief that disclosure of such information is necessary to investigate, prevent, or take action regarding any illegal activities or regarding interference with the operation of our site or violation of its terms of use; or
  7. We may disclose the information if we believe that disclosure is required by law or regulation or in response to a subpoena or other order of a court or other governmental agency.

Appalachian Power uses Flurry Analytics Service (provided by Yahoo) in order to improve its mobile apps. Flurry’s privacy policy governs the use of this information.

Also, Appalachian Power reserves the right to share any aggregated information (i.e., non-personally identifiable information) with any third parties for any reason, unless prohibited by law.

We will not sell, rent or otherwise disclose the information we gather about you or your account to any third party, except as outlined in this Privacy Policy.

Security

Appalachian Power takes reasonable steps to protect your personally identifiable information as it is transferred to us, through the use of Web technologies such as the Secure Sockets Layer and others. However, no Internet transmission of information is ever completely secure or error-free. In particular, e-mail sent to or from Appalachian Power may not be secure.

How to Reach Us

If you would like to update your personally identifiable information or if you have questions about this privacy policy, please contact us.

Changes to This Policy

Appalachian Power reserves the right to change this Privacy Policy at any time. If this Privacy Policy changes, the revised policy will be posted to this site. Please review this Privacy Policy before you provide any personally identifiable information through this site. Use of our web site after the posting of a revised privacy policy constitutes your consent to the revised policy.

This policy was last revised on December 13, 2017.

Close ×

Sign Up For Alerts

Subscribing to APCO alerts gives you instant notification for:

  • Billing & Payments - avoid late payments and disconnection
  • Outage Updates - find out if there's an outage at your address and when power will be back on

Win an Xbox One with Alerts!

Enroll in alerts to be eligible to win. Subscribing to I&M alerts gives you instant notification for:

  • Billing & Payments - avoid late payments and disconnection
  • Outage Updates - find out if there's an outage at your address and when power will be back on

Loading video...

×