Chamber News

Gov. McDonnell Signs Bill Reducing Electricity 12%

Governor Bob McDonnell was joined by delegates and senators from throughout Southside, western and southwestern Virginia this morning as he signed his first bills since taking office.

Governor McDonnell Signs Legislation Reducing Cost of Electricity for Appalachian Power Customers --First Bills Signed as Governor-- McDonnell Joined by Bill Patrons Senator Phillip Puckett and Delegate Bill Carrico; Other Local Legislators RICHMOND - Governor Bob McDonnell was joined by delegates and senators from throughout Southside, western and southwestern Virginia this morning as he signed his first bills since taking office. The Governor signed HB 1308, patroned by Delegate Bill Carrico (R-Galax) and SB 680 patroned by Senator Phillip Puckett (D-Tazewell), identical pieces of emergency legislation that will immediately reduce the cost of electricity to Appalachian Power’s residential customers by approximately 12%. The legislation will suspend the “interim rates� that went into effect in December when the Company filed an application for a rate increase with the State Corporation Commission. The law will no longer allow interim rates in cases like this one, and APCo agreed to apply the law immediately to their current rates. Pleased to sign the bill as soon as it reached his desk, Governor McDonnell remarked, “This bipartisan legislation provides badly needed, immediate relief to the customers of Appalachian Power. I want to thank APCo for being a partner with the legislature to find a short term solution to the immediate problem, while we examine the overall issues associated with the recent steed rate increases more carefully. APCo’s customers include families, small businesses, and industry in Southside, western and southwest Virginia, areas of our state least able to cope with the steep and steady increases in energy costs that have occurred. Three years ago, while I was Attorney General, we worked with the legislature to protect all of Virginia’s citizens from skyrocketing energy costs by re-regulating electricity. In that legislation we balanced the need to keep electricity reasonably priced today while at the same time promoting investment in expanded generation infrastructure in order to assure reasonably priced reliable power for the future. I am glad that the General Assembly found a way to provide urgently needed relief without making wholesale changes to the 2007 law that has yet to be fully implemented. I want to thank Senator Phil Puckett and Delegate Bill Carrico for their leadership on this issue, and all the members of the General Assembly who worked together to get this important legislation passed.� McDonnell added, “Utilities are allowed to recover the reasonable cost of providing electricity to their customers. APCo’s environmental upgrades, and the deteriorating economy, have cost the company nearly what building new generation would have. In 2007, we made certain the State Corporation Commission retained the tools it needs to examine APCo’s application fully, and we trust the Commission will take the current difficult economic circumstances into account as it makes a decision in APCo’s current rate case, and do what it can to mitigate the impact of required cost recovery on APCo’s customers.� Speaking about the legislation, Senator Phil Puckett noted, “This was a bipartisan effort to bring needed relief to Virginians struggling with high energy prices. I am pleased by the quick action of the General Assembly in responding to an issue of pressing importance for citizens throughout our part of the Commonwealth.� Delegate Bill Carrico added, “In this tough economy every dollar counts. Increasingly Virginians in this part of the state were feeling the pinch of quickly escalating energy bills, only made worse by a colder than normal winter. This legislation provides immediate relief that is sorely needed, and I thank the Governor for moving quickly to sign this bill into law.� The legislation signed today was developed in response to the great concern families and businesses arising out of APCo’s multiple rate increases over the last 2-3 years. The increases led to hardship for the residents and businesses of Southside, western and southwestern Virginia. In the last few years, APCo’s rates have moved from among the lowest in the country to just above the national average, resulting in significant rate shock to its customers. The increases have been driven primarily by the cost of federally required environmental improvements to APCo’s coal-fired generation plants, and exacerbated by decreasing demand as a consequence of the contracting economy. The most recent “interim rate� increase - in December, 2009 - came only one year after a 19.3% increase was approved by the Commission, and just as APCo’s customers headed into a colder than normal winter and the higher cost of power associated with peak demand. Governor McDonnell will be meeting with APCo officials and other concerned parties to determine what further action might be taken to maintain reasonable electricity rates for Virginians.