State legislation aimed to reducing rates charged by Appalachian Power was unanimously approved by the Democratic controlled General Assembly and now goes to Gov. Glenn Youngkin-Republican.
House Bill 2621 seeks to remove fuel costs from customer bills, which would create an estimated $408 million savings and a 13% reduction in customer bills. That would reduce company profits by an estimated $1.8 billion, according to a written statement.
This makes the act the largest rate reduction legislation in many years, according to the statement.
Much of the legislation deals with language for the utility to petition the State Corporation Commission for a financing order to securitize — combine financial assets to create new securities that can be sold to investors.
The bill would direct the power provider to “securitize their existing coal units” and allow the company to recover costs from responding to the devastating impacts caused by Hurricane Helene and this winter’s storms, according to a written statement.
Additionally, the legislation forbids the State Corporation Commission and APCo from implementing any rate increases in the months of November through February, protecting ratepayers from hikes during the most high-usage months, according to the statement.
This provision also applies to any increases approved prior to the bill becoming law.
While this is a positive step, we have also heard many concerns over the current budget-billing program of Appalachian Power, which may create savings upfront but often leave a large “catch-up” bill at the end of the annual billing period. In response to these concerns, the act includes a requirement for APCo to propose for the SCC’s consideration new alternatives to this program which will include seasonal rates to combat the rate shock that occurs during the winter months.
The bill also includes a 6 month moratorium on late fees and interest and a 9-month moratorium on reconnection fees. Finally, the legislation requires that the SCC solicit and consider public comment during all rate review cases, these occur on a biennial basis.
“This was quite likely the most important bill of the legislative session for Southwest Virginia and members of the Southwest Virginia delegation played a crucial role in the passage of the act at multiple intervals throughout session,” Del. Israel O’Quinn, R-Bristol, said in the statement." We worked extremely hard to lower utility costs for constituents and I was proud to serve as chief co-patron of the bill.
“The governor can now either sign the bill or send us amendments to consider. We will be in contact with him to see what he plans to do,” he said.
dmcgee@bristolnews.com — Twitter: @DMcGeeBHC