West Virginia electric utilities offer discount for new or expanding businesses

Two electric utilities serving customers in West Virginia have announced a new discounted "incentive rate" to attract new businesses and grow existing businesses.

Appalachian Power Company and Wheeling Power Company announced on February 14, 2019, that they are are offering discounted rates for electric service to new or expanding businesses meeting defined standards. The discount reduces qualifying customers' incremental billing demand by 40% for a 5-year term. The utilities are offering this new rate to new or existing customers who establish at least 500 kilowatts of new demand for electricity and meet criteria including creating at least 10 jobs or investing at least $2.5 million in an expansion in West Virginia.

The announcement follows a January 29, 2019 decision by the Public Service Commission of West Virginia to approve the companies' "Economic Development Rider" tariff proposed by the utilities in a November 28, 2018 filing. According to the Commission, the discounted rate is "experimental in nature" and is limited in size to an aggregate of 250 megawatts for the companies. As approved by the Commission, the rate will impose no incremental rate burden on any of the companies' West Virginia retail customers, and should result in a net contribution to defray the companies' fixed costs.

According to the Commission's order, the discounted rate will not be available in instances where there is "simply a change in ownership of existing customer operations", where operations are merely relocated within the companies' services territories, or where increases in demand result from the resumption of normal operations following abnormal operating conditions. The rate is also unavailable to "business facilities engaged in the retail sale to the average customer of consumer or final goods" due to concerns that adding new customers engaged in competitive retail sales of consumer goods would increase the "likelihood that the new load will displace an existing load with the net result being zero benefits."

The Commission noted the companies' expectation that the rate "will serve as an inducement for economic development in the West Virginia service territories of the Companies" and that "the resulting economic development will be beneficial to the West Virginia retail ratepayers of the Companies and to the economy of West Virginia."

Appalachian Power and Wheeling Power are subsidiaries of American Electric Power. AEP Appalachian Power has 1 million customers in Virginia, West Virginia and Tennessee.