Proposed Va. bill aims at AEP's electric rates

RICHMOND – A bill sponsored by two Virginia state senators is putting pressure on Appalachian Electric Power to rein in customer power rates and help attract data centers to the region.Senate Bill 1281 – introduced by Sen. Travis Hackworth, R-Richlands, and co-sponsored by Sen. Todd Pillion, R-Abingdon – would give Phase I customers the ability to switch from that company to other providers in the regional transmission organization PJM to find cheaper power bills.AEP is considered a Phase I utility since it was not subject to a 1999 State Corporation Commission settlement on electric rates. Dominion Energy – subject to that settlement – is classed as a Phase II utility.AEP is the only Phase I utility in Virginia.The Times News reached out Monday to AEP officials.Hackworth's bill states that AEP retail customers whose power bills are more than 25% above the statewide billing average would be able to give AEP 90 days' notice that they are using another utility provider. Customers then would buy their power – transmitted across AEP lines.The conditions would apply to customers using 1,000 kilowatts or more a month."We've been in discussions and negotiations with AEP for the past four years over rate increases that happen each year, or multiple increases in a year," Hackworth said Monday. "We've given them data about Dominion Energy and Bristol Virginia Utilities' rates that show they are substantially lower.""This is the number one issue I hear about from my constituents, and something has to be done," Pillion said.Dominion's average utility customer rates are 54% lower than AEP's, Hackworth said, while BVU customers on the average pay 60% less for electricity."Many of our constituents are below the poverty line," said Hackworth, "and they face the choice between power bills or food and medicine.""AEP provides the most expensive electricity for one of the most vulnerable populationsin the Commonwealth," Pillion added. "Right now, there's nothing that customers can do about it. We need options and this bill opens up opportunities so that people can feel relief in their wallets.""AEP needs to realize that their competitors are providing the same service for much less," said Pillion. "If they want to continue serving our constituents, they need to find ways to lower their rates closer to the statewide average."Hackworth said the bill addresses four major issues in addition to power rates.Deregulation and competitionThe bill would allow deregulation of power territories much like telephone servicederegulation in the 1980s and increase competition, said Hackworth. 'AEP's serves approximately 500,000 Virginia customers compared to Dominion's five million in-state customers, Hackworth said, adding that AEP officials have said the utility has a lower density of customers over a wide geographic area.Given the disparity in the two utilities' rates, that raises questions about AEP's efficiency and competitiveness, Hackworth added."If you can't be efficient and competitive, merge with another corporation," Hackworth said.Natural gas for regional benefitSB 1281 would give smaller Southwest Virginia cooperatives and independent power suppliers an opportunity to compete with AEP. Hackworth said Powell Valley Electric Cooperative and the town of Richlands in Tazewell County already serve customers within AEP's geographic territory.Richlands recently got a state Tobacco Commission grant to build a small natural gas-fired generation plant to supplement power it purchases from utilities in the PJM regional transmission organization, Hackworth said, and that points to how other potential and existing electricity suppliers can boost power availability in Southwest Virginia."Southwest Virginia is the largest producer of natural gas in the state, but we do not use it to benefit our residents," said Hackworth. "We ship it all over the country and up and down the east coast, but don't really have infrastructure for systems for heating or other appliances.""All of the aboveVirginia is ninth in the U.S. in terms of people and businesses locating in a state, Hackworth said. That comes as the state's projected energy demand is growing 7% annually, and that means a need for affordable, reliable and environmentally responsible energy supplies."Solar, wind and hydro alone aren't going to cut it," Hackworth said. "We need an all -of-the-above approach; small modular reactors, gas, not decommissioning efficient plants like the (Dominion Hybrid" Energy Center in Virginia City. Solar and wind power are also a part of that, and we have a lot of abandoned mine land where we can build solar farms.Data centersBringing data center operations to Southwest Virginia has been a goal of the region's economic developers and planning districts since 2019., Hackworth said While Northern Virginia – the primary state region where data centers have been located – is becoming crowded for new centers, he said data companies are balking at moving into the region."We've talked to data centers, and one reason they say they aren't locating here is because of the higher power cost," said Hackworth.SB 1281 does not have a direct counterpart in the House of Delegates yet, Hackworth said, although Del. Will Morefield, R-North Tazewell, is looking at the possibility of complementary House legislation.