'I think it's crazy:' ABC13 investigates why your electric bill has skyrocketed in recent years

LYNCHBURG, Va. (WSET) — Appalachian Power customers are preparing to pay higher bills again as many families are already struggling to make ends meet due to everyday inflation costs.

“I think it's ridiculous. “It's going to get to the point where people can't pay those prices anymore,” said Appalachian Power customer Brittany Brady.

The company is proposing another base rate increase that would add an additional $6 to the average customer's monthly bill – more than $70 per year.

“In the grand scheme of things, $5 or $10 may not seem like a lot to some people, but for most families right now that’s breaking the bank,” Brady said.

Brady has been an Appalachian Power customer since 2021. In just three years, she has seen her bill double.

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“Our first bill here was about $100. Now it’s $320 to $340 a month,” Brady said.

Here is a breakdown of AEP's 2021 to 2024 tariff changes:

• 2021: Transfer rate increased by 11%. Fuel costs rose 2.5%.
• 2022: The transmission rate increased by 2.36%. Fuel costs rose 16%. The basic tariff for electricity rose by 6.7%.
• 2023: The transmission rate increased by 2.63%. Fuel costs fell by 1.12%. The base interest rate was reduced by 1.75%.
• 2024: The transmission rate fell by 1.2%. Fuel costs unchanged. The base interest rate rose by 9.46%.

So the big question is: How much more will I pay for electricity in 2024 compared to 2021?

According to Appalachian Power, your bill is 46% more expensive than it was three years ago. In 2021, an average customer using 1,000 kilowatt hours of electricity paid $117 per month. Now, a customer using the same amount of electricity would pay about $171 per month. That means you'll pay $600 more per year for electricity compared to 2021.

“I think it's crazy. Just because a company has a monopoly over an area doesn’t mean we should give them free rein to take advantage of people,” Brady said.

Some state lawmakers are now fighting back and trying to publicize the impact of a possible rate hike.

Families are unable to cope with this. “There is no good reason for Appalachian Power to increase its profit margin other than to line the pockets of its shareholders,” said 38th District Delegate Sam Rasoul.

“We Virginians are really tired of overpaying for our utilities. Too many of our basic bills have increased and they are simply shrinking. $10 here, $20 there; it’s really starting to add up,” Rasoul said.

The Virginia State Corporation Commission (SCC) is responsible for reviewing Appalachian Power's rate increase requests.

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Since there have been several increases in recent years, I asked the SCC why they continue to approve the applications, especially since many families cannot afford additional costs during this time.

The SCC responded via email:

“While rate cases are typically quite complex, Virginia law requires that regulated electric utilities be given the opportunity to recover through their rates their 'reasonable and prudent' operating costs plus a 'fair' return (profit) on their 'rate base.' “ “, which is the value of their capital investments in things like power plants and the distribution network. Rates must be “fair and reasonable” and the statutes specify how the commission should determine a fair rate of return.

The SCC is currently reviewing Appalachian Power's latest application for a possible base rate increase. Dozens of customers emailed their concerns about this increase to the SCC as part of the case's public comment period.

Many customers explained how afraid they were to open the next invoice.

“When you see electricity prices going up, along with the prices of everything else, there's not much left to work with. You don't know. This month my bill was $320, and next month it could be $400,” Brady said.

Appalachian Power did not want to do an interview. They would only answer my questions via email. Here are their spokesperson's answers:

Why was this rate increase proposed?

“The demand for an increase in the base charge for service is driven by a number of factors that other utilities across the country are also grappling with. These include cost recovery for service restoration during severe storms, increasing costs of capital, materials and labor, The Company's application also fully addresses costs associated with the Company's SCC-approved vegetation management program to ensure service reliability for customers in to improve areas prone to tree-related failures.

The press release states: “The company requests an increase in revenue of approximately $95 million.” Why does Appalachian Power need to increase profits so much? What is this money used for?

“Appalachian Power lowered its revenue requirement from $95 million to $64 million. This would increase the base rate for residential customers by $6.75 per 1,000 kWh consumed. The profit component is a minor part of the tariffs; “The vast majority of revenue the company generates from customers is intended to cover the costs of providing safe and reliable electricity.”

Many families are already trying to make ends meet as prices for basic necessities have risen across the board. How do you respond to families who are already struggling to pay their bills, knowing that this rate change would result in a further increase in their bills?

“Appalachian Power employees work hard every day to provide customers with safe and reliable service while keeping costs as low as possible. This rate application is tied to covering costs we have already incurred to restore service during severe storms, as well as increases in capital, material and labor costs, and increasing interest rates. Additionally, costs associated with the Company's tree and brush trimming program, designed to improve service reliability for customers in areas prone to tree-related outages, are included. If a customer is having difficulty paying their bill, we encourage them to do so to contact us as quickly as possible. Our customer service representatives are trained to help customers find the right resources, payment options and plans for their situation.

There were hundreds of customers who participated in the public comment process in this case, most of whom expressed negative reactions to this rate change. Has Appalachian Power taken these comments into account?

“Appalachian Power’s rates are regulated by the Virginia State Corporation Commission (SCC). It was the SCC that held the hearing last week to gather feedback from the public. The SCC judges will consider the public’s feedback when issuing a final order in November regarding Appalachian Power’s application.”

The average customer's bills have increased by over 40% since 2021. Why are there constant tariff changes and increases?

The company is obliged to update the fuel declaration every year. According to the 2023 law, a review of the base rate must be requested every two years.

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The SCC is expected to decide on the tariff increase in November. If they agree to the change, it will take effect in January 2025.