Pay More for Less?

PSC must be skeptical of electricity rate hikes

You turn off the lights when leaving a room. You adjust the thermostat, up a degree or two in summer, down in winter. You do other things to reduce your use of electricity.

Your reward? A higher electric bill, if Appalachian Power gets its way.

The company is seeking a $114.6 million rate increase — more than 11 percent for residential customers. Why? Because people are using less electricity.

Consume less, pay more.

It makes some sense, in a way. Appalachian and its parent company, American Electric Power, have to maintain expensive infrastructure including power plants and distribution lines. The cost for that is the same regardless of how much electricity is being generated. Someone has to cover the cost.

Still, the company’s rate increase plan rubs some customers the wrong way.

AEP is not exactly struggling. During the first quarter of this year, the firm reported a profit of $454 million. Appalachian Power notes it has benefited from the national tax reform law enacted last year. That has saved the company about $52 million.

Appalachian, which serves most residents and businesses in West Virginia, already has begun informing customers of the planned increase. It still must be approved by the state Public Service Commission, however.

PSC officials have not been in a rubber-stamping mood this year. Just weeks ago, the commission rejected Appalachian’s proposal to buy two wind farms, one in Greenbrier County and the other in Ohio.

Commissioners took that action after the PSC staff reported the purchase would have increased West Virginians’ power bills by about $50 million.

Similar skepticism ought to be focused on Appalachian’s $114.6 million rate hike proposal. Is all of it absolutely necessary? Or is the company padding its increases to jack up profits and/or engage in imprudent projects such as “alternative” energy?

Perhaps some of the increase is necessary. Still, the PSC should recognize that telling people they have to pay higher power bills because they are using less electricity just doesn’t pass the smell test.