ROANOKE, Va., Feb. 26, 2015 – Appalachian Power residential customers in Virginia will see a decrease of about 4 percent in their total electric bills beginning this month. The decrease is the result of the reduction or expiration of three Rate Adjustment Clauses – or RACs.

The Environmental RAC (E-RAC) ended on Feb. 12, the Generation RAC (G-RAC) was reduced on Feb. 15, and the Renewable Portfolio Standard RAC (RPS-RAC) was suspended Feb 1. These changes will result in an Appalachian Power Virginia residential customer paying about $114.92 for 1,000 kilowatt-hours of electricity a month. That is a reduction from more than $119 at the beginning of 2015.

The decrease will vary depending on electricity usage. There is a current refund credit being issued to customers that is not included in the 4 percent rate reduction calculation.   

“Following a period of significant increases to pay for about $2 billion of required environmental upgrades, we have enjoyed relatively flat rates in Virginia for the past few years. Now that these RACs can be lowered, it is even better news for our customers and the economy,” said Charles Patton, Appalachian president and chief operating officer.

The changes in the overall customer bill are due to the use of RACs for the collection of costs that are mandated or are investments specifically approved by the Virginia State Corporation Commission (SCC). RACs are regulated by the SCC and generally provide no profit for the company.

RAC adjustments are separate from the base rate. The base rate accounts for approximately 60 percent of the bill customers pay for electricity. The other major component of the bill is determined by RACs which are adjusted periodically to reflect actual costs 

Appalachian’s residential customer bills remain approximately 15 percent below the national average, 21 percent below the East Coast average and are lower or comparable to other Virginia utilities.

Appalachian Power has 1 million customers in Virginia, West Virginia and Tennessee (as AEP Appalachian Power). About 500,000 customers are in Virginia. 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. 

                                                                                                                             ###