www.statejournal.com/story.cfm?func=viewstory&storyid=2 -
[Cached Version]
Published on: 5/3/2007
Last Visited: 12/17/2007
But the problem is not simply that the proposed increase is high, said Derrick Williamson, an attorney who is helping to oppose the increase for a group of large industrial energy users known as the West Virginia Energy Users Group.
The problem, in part, is that it follows on the heels of the environmental control charge.
"That ECC by itself, separate from this case, results in anywhere from a 5 to 7 percent rate increase for industrial customers," Williamson said."It's a big impact."
The second rate increase might come to 15 percent for industrial customers on average, he said, but for some it's as high as 21 percent -- on top of the ECC.
But another objection to the proposed increase is that it is based in part on Allegheny's desire to receive a return on equity of 11.75 percent.
"We think that's entirely inappropriate because the company has a very reliable revenue stream in West Virginia; it's not a risky investment," Williamson said."Therefore, we propose a 9.9 percent return."
It's a change that would reduce the increase by about $20 million.
The WVEUG further argues that large industrial customers historically have provided more than their fair share to the system, Williamson said, and proposes a different split in any increase: 12.95 percent for residential customers and 13 to 14 percent for industrial customers.
"Industrial customers would still pay more than residential, but not as much as they would have under the Allegheny Power proposal," he said.
Williamson concedes that Allegheny has not had a base rate increase in many years and is entitled to recover the cost of fuel.
But, he said, all of that results in part from the missteps of earlier management that drove the utility near bankruptcy in 2003.
"You can't discriminate between one set of leadership and another -- the company was mismanaged and has put itself in a situation where they have to do some creative things," he said.
15 online sources [ view sources ]
Profile is not claimed [ claim profile ]
