When January and February became some of the consistently coldest on record for the Appalachian Highlands, electric bills soared, and some Southwest Virginia politicians took action.
The APCo Rate Reduction Act — HB2621 — is a bill which represents the most significant rate relief bill for APCo customers in decades. The legislation will simplify customer bills, address the rate shock that often hits during winter months, create a mechanism to protect customers from the cost of storm repairs and generation facilities, all while significantly cutting APCo profits and reducing rates.
On Feb. 22, the bill passed on a vote of 98-0 in the House of Delegates and 39-0 in the Senate of Virginia. As of press time, it was on its way to Governor Youngkin’s desk, according to the Virginia General Assembly.
Delegate Israel O’Quinn of Bristol and Washington County expressed gratitude to Delegate Jason Ballard for serving as Chief Patron of the bill.
“This was quite likely the most important bill of the legislative session for Southwest Virginia and members of the SWVA Delegation played a crucial role in the passage of the Act at multiple intervals throughout the session,” O’Quinn explained. “We worked extremely hard to lower utility costs for constituents and I was proud to serve as Chief Co-Patron of the bill. The governor can now either sign the bill or send us amendments to consider. We will be in contact with him to see what he plans to do.”
Essentially, the bill calls for an overhaul of the rate-setting process.
Under the legislation, which had versions in the Senate and House of Delegates, APCo will be banned from implementing any rate increases through March 1st, 2026, while also giving the State Corporation Commission (SCC) the authority to conduct annual reviews of the majority of APCo’s rates.
APCo will also be required to propose to the SCC new seasonal rates and alternatives to budget billing that will provide relief during high usage months while eliminating the “catch up” payment that customers are faced with each year.
HB2621 empowers the SCC to simplify customer bills by rolling several rate adjustment causes into the base rate and strictly prohibiting APCo from applying for any further RACs for these costs.
APCo will be required to securitize, or refinance, the book value of its two remaining coal units, creating a $900 million dollar reduction in APCo profits. APCo will also be required to securitize storm-related costs from Hurricane Helene and other winter storms, a further $100 million in profit reductions. These changes, combined with the $408 million in savings due to fuel costs being removed from customer bills because of prior legislation carried by O’Quinn, will save customers approximately $245 million annually. APCo will see an estimated $1.4 billion in profit reduction along with a 13% average reduction in bills per kilowatt-hour.
“It is an honor to be a Chief Co-Patron on this piece of legislation,” Delegate Terry Kilgore said in a press release. “Over the last several years, I have heard from countless constituents as their APCo bills have continued to rise. Delegate Ballard, Delegate O’Quinn and I knew we had to do something this session to provide relief for the people of Southwest Virginia. This legislation will quickly put money back into ratepayers’ pockets. Our goal is to protect our people. This piece of legislation is definitely a start to do just that.”
Kilgore and other Southwest Virginia delegates needed and received support from their fellow lawmakers to the north, whose constituents are not Appalachian Power customers. There are only seven members in the House of Delegates from west of Roanoke; Fairfax County alone has 18.
O’Quinn also said he’s proud to be a Chief Co-patron of this legislation and explained that the potential cost savings for customers could be historic.
“It is the largest single decrease that anyone around the capital can remember happening all at once,” he recently told WJHL. “So, again, this is certainly a work in progress. But what we’ve been able to piece together with this bill is a significant amount of savings for ratepayers and will help to ease some of that sticker shock that people get when they open their bills during the cold winter months.”
