Even with a big subsidy on their coal costs from the 2012 Legislature, AEP won’t cut rates enough to help Century Aluminum restart. But then, why should the Ohio power company care about WV workers? AEP couldn’t agree with Century on electric rates, as laid out in the bailout legislation, so the WV PSC is going to have to set the special rates. (This Charleston Gazette link will die in a week.)
The Gazette’s Paul Nyden provided more information in a story three days ago.
Susan Small, a spokeswoman for the PSC, released the agency’s statement Friday afternoon.
“The Public Service Commission today received a filing from Century Aluminum which indicates that Century and Appalachian Power Company could not agree on an acceptable special rate for electric service to Century.
“Under recently-passed legislation [by the state Legislature], the parties must attempt to reach an agreement or, if no agreement could be reached, the industrial customer could file a complaint with the commission.
“The failure to reach an agreement leaves the commission with the obligation to determine whether or what type of rate recovery is appropriate.
“The PSC was disappointed that the parties could not reach an agreement regarding the terms and conditions of a special rate in order to reopen the Century Aluminum plant,” the PSC stated.
And, of course, when the dust settles, and AEP has extorted West Virginia some more, residential rate payers, particularly AEP customers, will end up subsidizing AEP’s coal and Century Aluminum’s electric bill.
Update: More bad news for AEP residential customers in today’s Charleston Daily Mail.
To restart and operate the plant, Century would get an annual $20 million-a-year discount on electricity through tax credits approved by the Legislature, a proposed $2.7 million annual subsidy from the Appalachian Power’s shareholders, and would use some of its own money. But if all of those sources still don’t add up to a break-even figure, Century wants the Public Service Commission to impose a surcharge on residential customers. Those customers presumably could get their money back when the price of aluminum is high.
In testimony submitted Friday with the rate request, John Hoerner, Century’s vice president of North American Operations, estimated the average residential bill for Appalachian Power customers is $113 a month. He said a $1 million surcharge would increase the average residential bill by about 11 cents a month.
What isn’t spelled out clearly in the public portion of Friday’s filing is how large the surcharge could be. There is some speculation that it could be as high as $100 million in 2013, the first full year. That would increase a residential bill by $11 a month, pushing an average bill from $113 to $124 – an increase of almost 10 percent.
So on top of the bond interest for AEP’s big coal bailout, AEP’s WV customers will face a 10% rate increase to pay for Century Aluminum’s electricity. The big out of state corporations are making lots of money, and West Virginians are paying the bills.