November 10, 2010
Customers of American Electric Power expressed concern during a Public Service Commission public hearing Tuesday at the Beckley-Raleigh County Courthouse.
The hearing addressed the rate hike proposed by AEP and their subsidiaries, Appalachian Power and Wheeling Power. PSC Commissioner Jon McKinney presided over the meeting, which included a representative from the PSC staff, the PSC consumer advocate, and representatives from Appalachian Power.
McKinney explained that the case was filled on May 14, 2010, but the commission has suspended the request for a base increase until March 31, 2011, giving them time to examine the proposal.
AEP seeks a base rate increase of 13.8% or $155 million.
Other parties participating in the case include large energy users; Wal-Mart, Kroger, South Bluefield Neighborhood Association and Steel of West Virginia. Those companies will give testimony in a formal hearing in Charleston.
Steve Ferguson, director of regulatory service for Appalachian Power stated that “we understand that it is a difficult time to request an increase,” He claimed that, while consumers are feeling the increase in the cost of living, so too has Appalachian Power; “We are facing the rising cost needed to provide safe, efficient and reliable service.”
He said that based on an average 1,000 kilowatt consumption, customers might expect an increase of $12.78 per month.
He pointed out that the company has had a hiring freeze since 2009 and implemented remote meter reading to decrease costs. Ferguson also noted that the company offers assistance for low income customers through the West Virginia utility assistance fund.
Jeri Matheney, director of communications for Appalachian Power, explained that a base rate increase is an increase in money that goes to “maintain the delivery system such as right of way maintenance, tree trimming, vegetation spraying and to maintain the lines themselves.” She said that although there have been increases recently, the base rate has not increased since 1992.
David Sade, the PSC’s deputy consumer advocate announced that he would be recommending a drastic decrease in the rate hike.
Several members of the community turned out to voice their opinions, concerns and questions.
Terry Tilley, energy manager for Wyoming County schools, explained that “in 2003, the school was paying 4.2 cents per kilowatt hour, now we are paying 8 cents. In the city of Mullens, we are paying almost 13 cents.”
Tilley said that the average income in Wyoming Co. is $23,000 annually and 28 percent of residents live below the poverty line. He stressed that if $10,308 is the poverty line, and residents in Mullens pay an average of $1,368 a year on their electricity, that leaves them with only $788 to live on every month. “I just don’t see how we can do that,” he said.
Tilley also stressed that the rate increase would cost the Wyoming County Board of Education an extra $50,000 per year. “It is not just people who are affected, it is the entire institution of southern West Virginia.”
Many retired citizens who live on fixed income voiced their concern. Linda Bunn, associate state director for AARP, stated that “our position is that senior citizens face difficult decisions, often having to choose between food, heat, and the medicine they need to keep them alive. They have not had a cost of living increase this year and they will not have one next year. If AEP achieves this rate hike, senior citizens will have seen a 70 percent increase in their bills over the last four years.”
Mary McFinney, a retired resident of Beckley, explained that she was on the Appalachian Power budget plan. “When I retired two years ago, my monthly payment was $94. It is now $172 and the thermostat stays the same year round.”
Roger Grammar, from Hog, suggested that, instead of a rate hike, maybe the money could be “trimmed from the top. How much is the CEO making?,” he asked. “Why can’t he take a cut?”
Randall Neirman suggested that those employed by Appalachian Power could take mandatory furlough days as many others in the community have had to do.
A retired school teacher from MacArthur, Muriel Kincaid, expressed her strong opinion; “Utilities should be more greatly regulated and the company needs some competition.” She also noted that during her 20 years of retirement, she has never had a cost of living rate adjustment in her retirement or social security.
Delegate-elect Rick Snuffer (R-Raleigh) asked, “I know that AEP has reduced their work force, but how many of us have not been asked to do more for less pay?
“I would like the commission and AEP to look at your profits,” he continued. “If you are making one, take a leave, help the businesses, seniors and families by withdrawing this request. Give our nation’s economy a chance to come back and then let’s have this discussion.”
Former state lawmaker Melvin Kessler pointed out that six years ago there was a similar public hearing held in Sophia.
“I will never forget an 85 year-old teacher who went back to work because she could not pay her electric bill, since then our bills have gone up 100 percent.”
Kessler added, “when gasoline when up over $4 per gallon and you all (AEP) got a price increase, did we get a decrease when the gas prices when down? I don’t remember a decrease.”
He urged members of the community to contact the PSC and their delegates about this issue.
Delegates Ricky Moye and Linda Sumner were both in attendance.
If you wish to send your comments to the Public Service Commission of West Virginia, you can mail them to 201 Brooks Street, P.O. Box 812, Charleston, WV 25323 with reference to PSC Case Number 10-0699-E-42T.