Monday, October 1, 2012

APCo wants another rate increase, this time to cover the costs of renewable energy… again


In a shocking announcement made Friday, Appalachian Power Company (APCo) said it filed a request with the Virginia State Corporation Commission (SCC) to bump up the monthly rates of its customers to recover the costs associated with renewable energy.[1] Okay, so maybe the announcement isn’t so surprising.

If the monthly rate increase is approved by the SCC, the typical residential customer using 1,000 kilowatt-hours of electricity will see their monthly bill go up by more than 25 cents.

In defense of its request with the SCC, APCo stated that it reached Virginia’s renewable energy goals over the previous 2 years. However, APCo met these relatively easy goals by BUYING wind power, not generating wind power itself.[2]

To add insult to injury, not only does APCo not generate wind energy itself, it already recovers some of the costs of delivering renewable energy to its customers through rate increases.

Thus, not only is APCo not meeting the original intent of Virginia’s renewable energy goals (to spur homegrown renewable energy generation and use), the power company is attempting to saddle its customers with even greater costs.

The audacity of Virginia’s power companies is hardly rivaled elsewhere in the state of Virginia. Remember that in Virginia, APCo and Dominion Virginia Power are given what amounts to a monopoly over the supply of energy to millions of Virginians.[3]

In effect, then, “Virginia’s monopoly utility regulatory regime “is not up to the job of ensuring least-cost energy services [and] is notoriously inadequate to minimize costs for consumers,”” said Vernon Smith, a former George Mason University economist.[4] Again, this is only one of the perverse consequences of handing companies like Dominion and APCo a monopoly over a majority of Virginia’s power supply.

These utilities have essentially been able to call their own shots and the shots they’ve called have not favored renewable energy. My argument is not to embrace renewable energy, no matter the costs. Rather, my argument is that these two utilities appear to have barely lifted a figurative finger to move Virginia towards greater renewable energy use. They must do so, and soon.

While Dominion and APCo will undoubtedly claim that renewable energy costs more, and would therefore necessitate another rate increase, the fact is that both have continually raised its customers rates anyways![5]

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