Special to the Daily News

CHARLESTON — Appalachian Power and Wheeling Power, together with the Public Service Commission of West Virginia (PSC) staff, the PSC Consumer Advocate Division and multiple industrial customers, recently filed a settlement agreement seeking the Commission’s approval in the companies’ ENEC case.

The ENEC, or Expanded Net Energy Cost, is designed to reimburse past and ongoing costs of fuel (primarily coal) and purchased power. No rate change is proposed in the settlement.

The case also includes $43 million in construction costs for two other projects that can be recovered through a PSC-approved mechanism to allow for recovery of investment between base cases. The projects include the installation and operation of federally-mandated environmental control equipment at the John Amos Plant and the cost of the new combined cycle natural gas Dresden Plant, which began commercial operation early this year. Neither of these causes a change in rates.

Coal and purchased power costs have escalated for Appalachian Power’s customers in the last several years. In 2009, the PSC issued an order to spread over a four-year period the costs of coal purchased in 2008 and 2009, when coal prices spiked to record highs. However, electricity sales continue to be depressed, so Appalachian still faces an under-recovery of $312 million in ENEC costs.

Appalachian plans to ask the PSC to authorize the issuance of Consumer Rate Relief Bonds as allowed by legislation passed this year. The bonds will be used to pay for the unrecovered balance of past fuel costs, as well as this year’s anticipated costs. If approved, current ENEC rates are expected to cover the cost of repaying the bonds as well as ongoing ENEC costs. Absent the stipulation, customers would have faced a 30 percent increase this year for recovery of these past costs.

“We appreciate the support of the PSC Staff, Consumer Advocate Division and others in this case who have put the interests of customers first and foremost,” said Appalachian Power President and COO Charles Patton. “The cooperation of these parties allowed us to reach this solution that will benefit all customers.”

Rates for Appalachian’s customers are well below the national average. The national average residential price for electricity is 11.6 cents per kilowatt-hour, compared to Appalachian’s 9.7 cents.