RICHMOND, Va., March 31, 2014 – Appalachian Power submitted filings today with the Virginia State Corporation Commission (SCC) that will hold steady the company’s base rate for the next two years.  The company also asked to lower customer rates in a separate rate adjustment clause (RAC) filing.

It also seeks authority to establish two new residential energy-efficiency programs. One program helps reduce energy use for low-income customers. A second program will reward homeowners’ participation for helping to reduce peak energy demands.

Appalachian’s current base rates were approved in 2011. In its biennial filing today, costs from 2012 and 2013 were examined. Despite additional and unexpected costs of $55 million to restore service to customers following the derecho, a widespread ice storm and other severe weather events, the company will not request a base rate increase. The base rate makes up about 67 percent of a customer’s total bill

“Our employees have worked hard to reduce costs throughout the company,” said Charles Patton, president and chief operating officer. “In fact, right now we’re undergoing an intensive efficiency effort to evaluate our work processes and add value to our customers. That has helped us achieve the goal to keep base rates level.”

The other rate-related case filed today requests a reduction in the RAC which recovers the company’s incremental participation costs in Virginia’s Renewable Portfolio Standard (RPS) program. Due primarily to the company’s optimization of renewable energy credits for contracted wind generation, customers should realize a RPS-RAC reduction of approximately $16 million.

The reduction, if approved by the SCC, will amount to a customer bill decrease of about one percent and will be implemented in early 2015.

Included in the biennial case are requests for the approval of two new programs designed to help reduce energy use. An energy efficiency program focuses on lower income customers who often have few resources or opportunity to invest in efficient homes or technology. Appalachian proposes to work with weatherization agencies in the region to provide home energy services to these households. Another part of this program will distribute compact fluorescent light bulbs (CFLs) via area food banks.

A proposed demand response program rewards residential power reduction during peak demand periods by offering a monetary incentive in return for installation of a load control device on customers’ homes. The device will allow the company to reduce demand by cycling central air conditioners and heat pumps for short periods at participating homes in times of high power demand.

Other requests in the biennial filing include a one-year extension to a vegetation management pilot program that is designed to enhance reliability through more comprehensive right-of-way management. Appalachian also seeks enhancements to the company’s Economic Development Rider which provides rate assistance to certain new or expanding businesses.

Appalachian Power has 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, which delivers electricity to 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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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.