Appalachian Power and Wheeling Power, both subsidiaries of American Electric Power (AEP), announced today they will file a petition with the Public Service Commission (PSC) of West Virginia on Monday seeking recovery of $442 million in fuel, purchased power and environmental compliance project expenses. This regular annual filing is a pass-through of fuel and purchased power costs that includes no profit for the company.
 
“We are very aware of the state of the economy and the fact that many of our customers are facing financial difficulties,” said Dana Waldo, president and COO of Appalachian Power. “We will work with the PSC and the Consumer Advocate to find a solution that will allow us to recover our legitimate costs of doing business while lessening the burden on our customers.”
 
Recovery of the entire $442 million would mean a 43 percent rate increase. However, the company will recommend that the PSC consider an alternative cost recovery proposal that would phase in the increase over three years. If the company’s recommendation is accepted, rates would increase by $189 million or 18.5 percent for this year, effective July 1, increasing bills for residential customers using 1,000 kilowatt-hours a month from $72.28 to $83.85.
 
Following the year one increase of 18.5 percent, the company projects increased rates of about 14.5 percent in year two and 13.2 percent in year three. With the three increases, rates would match expenses by the end of five years.
 
“This request is driven by the cost of coal,” Waldo said. “Coal prices rose drastically last year, and although they have stabilized, the average price we’re paying is still well above the price reflected in our current rates.”
 
Monday’s filing is Appalachian Power’s regular annual Expanded Net Energy Charge (ENEC) filing to adjust for the costs of fuel and purchased power. The filing also adjusts rates to recover the cost of environmental compliance construction projects. Waldo noted that Century Aluminum’s recent closure had a minimal affect on this filing.
 
Rates for Appalachian’s customers are among the lowest in the country. The national average price for electricity is 11.3 cents per kilowatt-hour, compared to Appalachian’s proposed 8.3 cents. Customers are urged to manage their energy use wisely and to visit the company’s Internet site ( www.WattWhyAndHow.com) for energy-saving tips and a free home energy calculator that can help explain how to conserve electricity. The site also provides information on payment options available to customers.
 
Appalachian Power provides electricity to 1 million customers in Virginia, West Virginia and Tennessee (as AEP Appalachian Power) and Wheeling Power provides electricity to customers primarily in Marshall and Ohio counties in West Virginia. Both companies are units 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. 


This report made by American Electric Power and its Registrant Subsidiaries contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although AEP and each of its Registrant Subsidiaries believe that their expectations are based on reasonable assumptions, any such statements may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are: electric load and customer growth; weather conditions, including storms; available sources and costs of, and transportation for, fuels and the creditworthiness and performance of fuel suppliers and transporters; availability of generating capacity and the performance of AEP’s generating plants; AEP’s ability to recover regulatory assets and stranded costs in connection with deregulation; AEP’s ability to recover increases in fuel and other energy costs through regulated or competitive electric rates; AEP’s ability to build or acquire generating capacity (including the ability to obtain any necessary regulatory approvals and permits) when needed at acceptable prices and terms and to recover those costs (including the costs of projects that are canceled) through applicable rate cases or competitive rates; new legislation, litigation and government regulation, including requirements for reduced emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter and other substances; timing and resolution of pending and future rate cases, negotiations and other regulatory decisions (including rate or other recovery of new investments in generation, distribution and transmission service and environmental compliance); resolution of litigation (including disputes arising from the bankruptcy of Enron Corp. and related matters); AEP’s ability to constrain operation and maintenance costs; the economic climate and growth or contraction in AEP’s service territory and changes in market demand and demographic patterns; inflationary and interest rate trends; volatility in the financial markets, particularly developments affecting the availability of capital on reasonable terms and developments impacting AEP’s ability to refinance existing debt at attractive rates; AEP’s ability to develop and execute a strategy based on a view regarding prices of electricity, natural gas and other energy-related commodities; changes in the creditworthiness of the counterparties with whom AEP has contractual arrangements, including participants in the energy trading markets; actions of rating agencies, including changes in the ratings of debt; volatility and changes in markets for electricity, natural gas, coal, nuclear fuel and other energy-related commodities; changes in utility regulation, including the implementation of the recently passed utility law in Ohio and the allocation of costs within regional transmission organizations; accounting pronouncements periodically issued by accounting standard-setting bodies; the impact of volatility in the capital markets on the value of the investments held by AEP’s pension, other postretirement benefit plans and nuclear decommissioning trust and the impact on future funding requirements; prices for power that AEP generates and sells at wholesale; changes in technology, particularly with respect to new, developing or alternative sources of generation; and other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.