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NOTICE TO THE PUBLIC OF PETITION FOR APPROVAL
OF REVISED RATE ADJUSTMENT CLAUSE, THE E-RAC,
BY APPALACHIAN POWER COMPANY
CASE NO. PUR-2022-00001
•Appalachian Power Company (“APCo”) has applied for a revision of its rate adjustment clause, the E-RAC, for recovery of costs incurred to comply with state
and federal environmental laws and regulations.
•APCo requests approval of a revenue requirement of $33.6 million for its E-RAC for the rate year beginning December 1, 2022, through November 30, 2023.
According to APCo, this amount would increase a residential customer’s bill using 1,000 kilowatt hours per month by $0.80.
•The State Corporation Commission will hold a telephonic hearing in this case on September 20, 2022, to receive public witness testimony.
•The Commission will hold an evidentiary hearing in this case on September 21, 2022.
•Further information about this case is available on the SCC website at: scc.virginia.gov/pages/Case-lnformation.
On March 18, 2022, pursuant to § 56-585.1 A 5 e of the Code of Virginia (“Code”), Appalachian Power Company (“APCo” or “Company”) filed with the State
Corporation Commission (“Commission”) a petition (“Petition”) for approval to recover costs through its existing rate adjustment clause (the “E-RAC”), related to
capital investments and operations and maintenance (“O&M”) compliance expenses that are necessary to comply with state and federal environmental regulations.
In Case No. PUR-2020-00258, the Commission approved the Company’s E-RAC, including actual and projected capital investment incurred to comply with the
EPA’s Coal Combustion Residuals Rule (“CCR Rule”) at the Company’s Amos and Mountaineer Plants (the “Plants”). The Commission denied, without prejudice,
the Company’s request to recover through the E-RAC its actual and projected capital investment incurred to comply with the EPA’s Steam Electric Effluent Limitation Guidelines (“ELG Rule”) at the Plants.
In its Petition herein, the Company seeks to recover a revenue requirement of $33.6 million during the rate year of December 1, 2022 through November 30, 2023
(“Rate Year”) through the E-RAC. This amount includes: (1) actual and projected capital investment to comply with the CCR Rule at the Plants; (2) actual and projected capital investment to comply with the ELG Rule at the Plants, including those incurred up to August 2021; (3) new capital investments related to dissolved
oxygen levels at the hydroelectric generating units at the Company’s Claytor Hydro Project and the dry sorbent injection system at Amos; (4) actual and projected
costs to comply with the regulation that established Virginia as a member of the Regional Greenhouse Gas Initiative associated with the dispatch of the Company’s gas-fired Clinch River Plant; and (5) actual and projected O&M compliance costs incurred in complying with environmental regulations at the Company’s
generation units.
In the 2021 E-RAC Order, the Commission found that the Company had “not met its burden of proving the reasonableness and prudence of the proposed ELG
investment costs,” but held that the Company should be permitted to provide additional analyses and evidence to support the ELG investment, “should APCo
conclude circumstances so warrant.”
The Petition explains that on December 23, 2020, APCo filed a petition with the Public Service Commission of West Virginia (“WVPSC”) seeking certificates of
convenience and necessity authorizing both the CCR and ELG projects at the Plants, as well as a cost recovery mechanism. The Company states that the WVPSC
approved the requests on August 4, 2021. On October 12, 2021, the WVPSC issued another order that confirmed its earlier decision, stating that, due to the Commission’s 2021 E-RAC Order, “Virginia...jurisdictional customers should receive no capacity or energy from the Plants after 2028.” The Company states that as the
Plants will continue to operate past 2028, no matter how the Commission rules on this Petition, circumstances warrant re-filing its request to recover the costs of the
ELG Projects.
APCo proposes a total revenue requirement of approximately $33.6 million during the Rate Year. Specifically, the Company indicates that its proposed revenue
requirement comprises four elements: (1) a Forecast Rate Year Component of $29.6 million; (2) a Forecast Allowance for Funds Used During Construction
Revenue Component of $4.3 million; (3) a True-up Revenue Component of ($0.5 million); and (4) an Actual Revenue Component of $0.2 million. For purposes of
calculating the revenue requirement, APCo states that it used an after tax rate of return on rate base of 6.817% based on the year ended December 31, 2020 capital
structure. The Company further states that this rate of return included the 9.20% return on equity approved by the Commission in Case No. PUR-2020-00015.
APCo states that it seeks to recover the revenue requirement by allocating costs to the Virginia jurisdiction consistent with the Company’s methodology approved
by the Commission in its previous E-RAC proceeding. If the proposed E-RAC is approved, the impact on customer bills would depend on the customer’s rate
schedule and usage. According to the Company, the revenue requirement would be an increase of $6.2 million over the Company’s existing E-RAC. APCo estimates that implementing this revenue requirement would increase a residential customer’s monthly bill, based on 1,000 kWh usage per month, by $0.80, or 0.6%,
when compared to rates effective December 1, 2021.
Interested persons are encouraged to review the Petition and supporting documents for the details of these and other proposals.
TAKE NOTICE that the Commission may apportion revenues among customer classes and/or design rates in a manner differing from that shown in the Petition and
supporting documents and thus may adopt rates that differ from those appearing in the Company’s Petition and supporting documents.
The Commission entered an Order for Notice and Hearing in this proceeding that, among other things, scheduled public hearings on APCo’s Petition. On September 20, 2022, at 10 a.m., the Commission will hold a telephonic hearing, with no witness present in the Commission’s courtroom, for the purpose of receiving
the testimony of public witnesses. On or before September 15, 2022, any person desiring to offer testimony as a public witness shall provide to the Commission
(a) your name, and (b) the telephone number that you wish the Commission to call during the hearing to receive your testimony. This information may be provided
to the Commission in three ways: (i) by filling out a form on the Commission’s website at scc.virginia.gov/pages/Webcasting; (ii) by completing and emailing the
PDF version of this form to SCCInfo@scc.virginia.gov; or (iii) by calling (804) 371-9141. This public witness hearing will be webcast at scc.virginia.gov/pages/
Webcasting.
On September 21, 2022, at 10 a.m., in the Commission’s second floor courtroom located in the Tyler Building, 1300 East Main Street, Richmond, Virginia 23219,
the Commission will convene a hearing to receive testimony and evidence related to the Petition from the Company, any respondents, and the Commission’s Staff.
The Commission takes judicial notice of the ongoing public health issues related to the spread of the coronavirus, or COVID-19. In accordance therewith, all pleadings, briefs, or other documents required to be served in this matter should be submitted electronically to the extent authorized by 5 VAC 5-20-150, Copies and
format, of the Commission’s Rules of Practice and Procedure (“Rules of Practice”). Confidential and Extraordinarily Sensitive information shall not be submitted
electronically and should comply with 5 VAC 5-20-170, Confidential information, of the Rules of Practice. Any person seeking to hand deliver and physically file
or submit any pleading or other document shall contact the Clerk’s Office Document Control Center at (804) 371-9838 to arrange the delivery.
Pursuant to 5 VAC 5-20-140, Filing and service, of the Commission’s Rules of Practice, the Commission has directed that service on parties and the Commission’s
Staff in this matter shall be accomplished by electronic means. Please refer to the Commission’s Order for Notice and Hearing for further instructions concerning
Confidential or Extraordinarily Sensitive Information.
An electronic copy of the public version of the Company’s Petition may be obtained by submitting a written request to counsel for the Company, Noelle J. Coates,
Esquire, 3 James Center, American Electric Power Service Corporation, 1051 East Cary Street, Suite 1100, Richmond, Virginia 23219, or njcoates@aep.com.
On or before September 14, 2022, any interested person may file comments on the Petition by following the instructions found on the Commission’s website: scc.
virginia.gov/casecomments/Submit-Public-Comments. All comments shall refer to Case No. PUR-2022-00001.
On or before June 17, 2022, any person or entity wishing to participate as a respondent in this proceeding may do so by filing a notice of participation with the
Clerk of the State Corporation Commission, c/o Document Control Center, P.O. Box 2118, Richmond, Virginia 23218-2118, or by filing electronically at scc.
virginia.gov/clk/efiling/. Such notice of participation shall include the email addresses of such parties or their counsel. The respondent simultaneously shall serve
a copy of the notice of participation on counsel to the Company. Pursuant to Rule 5 VAC 5-20-80 B, Participation as a respondent, of the Commission’s Rules
of Practice, any notice of participation shall set forth: (i) a precise statement of the interest of the respondent; (ii) a statement of the specific action sought to the
extent then known; and (iii) the factual and legal basis for the action. Any organization, corporation, or government body participating as a respondent must be
represented by counsel as required by Rule 5 VAC 5-20-30, Counsel, of the Rules of Practice. All filings shall refer to Case No. PUR-2022-00001.
On or before July 29, 2022, each respondent may file with the Clerk of the Commission at the address above or electronically at scc.virginia.gov/clk/efiling/, and
serve on the Commission’s Staff, the Company, and all other respondents, any testimony and exhibits by which the respondent expects to establish its case, and
each witness’s testimony shall include a summary not to exceed one page. In all filings, respondents shall comply with the Commission’s Rules of Practice, including 5 VAC 5-20-140, Filing and service; and 5 VAC 5-20-240, Prepared testimony and exhibits. All filings shall refer to Case No. PUR-2022-00001.
Any documents filed in paper form with the Office of the Clerk of the Commission in this docket may use both sides of the paper. In all other respects, except as
modified by the Commission’s Order for Notice and Hearing, all filings shall comply fully with the requirements of 5 VAC 5-20-150, Copies and format, of the
Commission’s Rules of Practice.
The public version of the Company’s Petition, the Commission’s Rules of Practice and the Commission’s Order for Notice and Hearing may be viewed on the
Commission’s website at: scc.virginia.gov/pages/Case-Information.
APPALACHIAN POWER COMPANY

4860 COX ROAD SUITE 150, GLEN ALLEN, VA 23060

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