Residents upset over Appalachian Power bills

Chatham resident Kimberly Moser could not believe her eyes when she saw the December/January electric bill.

Her power costs shot up from $170.92 in November/December to $438.06 last month. She and her husband keep the thermostat on 69 or 70 degrees, but they recently turned it down to 64 one night after receiving their astronomical bill from Appalachian Power.

That’s why Delegate Ward Armstrong, D-10th District, plans to introduce legislation during the 2010 General Assembly session to address complaints regarding rate increases by the power company. According to Armstrong, Appalachian Power has sought approval for 13 rate hikes from the State Corporation Commission since 2005.

“In speaking with my constituents over the past year at county fairs, town hall meetings and at their doors, the top concern is higher electric rates,” Armstrong said in a prepared statement. “People are choosing between purchasing food and medicine or paying their electric bill. Our families and our local businesses which drive our economy are suffering.”

But Todd Burns, Appalachian Power spokesman, said the company has had to request rate hikes because the costs of producing and delivering electricity to customers are going up. A major expense: having to comply with state and federal environmental regulations, Burns said. From 2006 to 2009, the purchase of costly equipment has expanded Appalachian’s assets from $4 billion to $6.5 billion, Burns said.

Since sending out its December bills, Appalachian has seen a 30 percent increase in customer call volume, Burns said. A 15.5 percent rate increase took effect on Dec. 12, with 12.5 percent of it a pending base-rate hike the SCC will hear in March.

Appalachian has 500,000 customers in western Virginia, which includes parts of Pittsylvania, Henry and Franklin counties.

Virginia law has allowed companies like Appalachian to apply base-rate increases while they’re pending before the SCC. The reason: there is no timetable dictating when the SCC must act whether to approve requests for base-rate increases, Burns said. This is the last instance that practice will be permitted, because the law has changed, Burns said.

Several factors drove bills up last month, in addition to the 15.5 percent rate hike. Recent colder-than-average temperatures swelled consumption, Burns said. The average high in November was 60 degrees Fahrenheit, while December 2009 was 20 percent colder than December 2008, Burns said. If residential customers compared their December 2009 bills to those from January 2009, “you won’t see as much of a difference,” he said.

Also, residential heat pumps work efficiently until outside temperatures dip below 30 degrees, when a costly, inefficient back-up furnace system kicks in. The furnace is more like a gigantic space heater with hot coils, Burns said. That’s why heating expenses went up for some customers even though inside temperature settings remained steady, Burns said.

“Your entire heating system has changed how it operates,” Burns said.

Also, some Appalachian consumers saw a 29-day billing cycle in November but a 34-day billing cycle the next month, leading to a bill reflecting a longer period of usage, Burns said.

As for billing practices, Armstrong’s legislation would force companies to consolidate its rate increase requests to the SCC, instead of permitting “stand-alone adjustments,” he said in the prepared statement. Armstrong’s proposed law would disallow utilities from applying rate increases before the SCC approves them. Currently, if the SCC rejects a request, the company pays the funds back to the SCC.

Appalachian offers payment programs to assist customers who have trouble paying their power bills, Burns said. For more information, contact the company’s call center at (800) 956-4237.