Charleston, W.Va., June 26, 2008 - The Public Service Commission (PSC) of West Virginia today issued an order approving a joint stipulation and settlement agreement applicable to Appalachian Power and Wheeling Power.

The Commission order grants the companies a combined annual increase in revenues of approximately $106 million, or 11.35 percent, effective July 1. The increase was requested through a cost recovery mechanism approved by the PSC in July 2006 that adjusts rates annually, primarily for increases or decreases in the cost of fuel and purchased power. In addition, the annual review provides for the timely recognition in rates of the cost of new facilities required to meet increased environmental regulations and service reliability improvements.

On or after July 1, 2008, residential customers using 1,000 kilowatt-hours a month will see their monthly bill rise from $64.55 to $72.28.
The majority of the rate increase, or approximately $88.3 million, is for increased expenses associated with fuel, primarily coal, and purchased power. Approximately $3.8 million is for service reliability improvements in the company’s West Virginia service territory.

The remaining $13.9 million of the increase is to provide recovery of recent additional environmental-related investments. Appalachian Power is investing more than $1.4 billion to build flue gas desulfurization units – scrubbers – to reduce sulfur dioxide emissions from its Mountaineer and John Amos generating plants and comply with mandated federal and state clean air laws. These projects will result in cleaner air at the lowest possible cost. The Mountaineer scrubber went on line in 2007; the first scrubber at Amos is set to begin operation next year.

Appalachian Power provides electricity to 1 million customers in Virginia, West Virginia and Tennessee (as AEP Appalachian Power). It is a unit of American Electric Power, one of the largest electric utilities in the United States, with more than 5 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s largest electricity transmission system, a nearly 39,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined. 

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