We understand that under the laws governing power monopolies — sorry, utilities — companies are entitled to recoup their expenses and make a little extra for the shareholders. But the rate hike requests are getting out of hand.
It all kicked off last winter when Mon Power/Potomac Edison/First Energy requested a rate increase because it lost money, ostensibly because it failed to keep enough fuel supply on hand and had to pay extra to get more. The Public Service Commission approved an $11.05 per month rate increase (which we’re paying now). However, it also suggested Mon Power purchase the Pleasants Power Plant. That, in turn, kicked off a whole firestorm in which Mon Power wanted to charge ratepayers $36 million to keep the plant idle while the company evaluated its options.
Fortunately, a third party purchased Pleasants. Unfortunately, Mon Power incurred hundreds of thousands of dollars in “authorized” costs during the process, which Mon Power customers will eventually be expected to pay.
Mon Power is also seeking a $207 million base rate increase (about $18 per month for residential customers). Mind you, the base rate is not the same as operating expenses. Operating expenses cover the costs of fuel to produce energy, moving energy, buying energy from other sources and environmental compliance. The base rate is comprised of personnel, taxes, debt, property (and depreciation) and other assets. And it’s the base rate that utilities get to make their profit from.
On top of that increase, there’s an expended net energy costs (ENEC) rate hike, to the tune of $167.5 million. That one would increase residential bills by $10.08 per month starting in March. Plus, there’s a 14-cent charge to all Mon Power customers for the solar beds Mon Power will be building.
If all three rate hikes are approved, Mon Power customers are looking at a nearly $30 jump on their bills.
Then there’s Hope Gas, which has asked for a $66.5 million rate increase as part of its Pipeline Replacement and Expansion Program (about $6.45 a month, which could be offset by the newly filed Purchased Gas Application). Though Hope hasn’t filed yet, we bet it will ask to recover the $37 million purchase price for People’s Gas.
Altogether, ratepayers are looking at nearly a $40 increase in their utility bills. That’s an extra $480 per year. And it’s ridiculous.
West Virginians are not made of money. We understand utilities are entitled, by law, to recuperate their costs and make some profit, but that profit cannot come at the expense of harming ratepayers. Not when temperature extremes mean greater reliance on AC in summer and heat in winter. Not when drastic rate increases may force people to choose between power and food or medicine or other essential bills.
The utility companies are asking for too much, too fast. The Public Service Commission must rein them in.