Allegheny Energy reaches settlement on rate hike in West Virginia
Under the settlement agreement filed, the parties have agreed that the company's West Virginia rates shall be increased by $142.5 million (annualized) on January 1, 2009, largely to recover anticipated increased costs of fuel and purchased power. Of this amount, $5.5 million represents the company's total under-recovery for the period May 2007 through June 2008. The agreement requires approval of the commission to be effective. It is reported that, if adopted, the typical residential customer using 1,000kWh per month would see an overall bill increase of about 15% or $11. According to the company, the proposed increase is largely due to the dramatic rise in coal prices, which is the single largest component of Allegheny's cost of producing electricity. Under a cost recovery clause established by the commission in 2007, customer rates are adjusted annually to reflect projected upward or downward changes in the cost of fuel and purchased power for the year ahead, and actual energy costs for the previous period.